Why are Tata cars just a shape
Jaguar: Ratan Tata
- Ratan Tata visits Whitley four or five times a year, and it's like the legendary investor Warren Buffett making a flying visit to Dortmund-Wichlinghofen. Tata is a 75 year old very rich Indian and head of one of the world's largest conglomerates: Tata Sons Ltd. Around 425,000 people work for him in around 100 companies, processing iron and steel, operating hotels, building trucks and locomotives, generating electricity, harvesting and packaging tea, producing software and much, much more.
Whitley is a suburb of Coventry in the middle of England that doesn't get the sun very often. With an Ibis hotel, a large park and a few small shops on the main streets. Not very exciting if it weren't for the cars: big, fast, expensive luxury cars.
Ratan Tata comes here to look at designs for the luxury brand Jaguar - around 2,000 people work at the Whitley plant, mainly in development, design and administration. He then looks at studies for vehicles that won't be rolling on the streets for five, seven or ten years, examines models and prototypes and wants to be inspired. The powerful man is here to see that his money is well spent. In spring 2008, Tata bought Jaguar and Land Rover from Ford for around 1.5 billion euros and merged them into Jaguar Land Rover (JLR). Never before had an emerging market automaker acquired two famous old-world luxury brands.
Ian Callum, head of design at Jaguar since 1999, is primarily responsible for its shine. He has a functional, unadorned office in the research center. His sky-blue XKR-S with wide tires and 550 hp is in front of the building in the front parking lot. "Noticeable, right down to the noise of the engine!" Says Callum and smiles. The 58-year-old Scot is an ambitious esthete who works on an egg-shaped home in his spare time. Callum has only good things to say about his top boss: "He makes suggestions - but he always respects the ideas of the professionals." And: "Mr. Tata loves cars. He has a great interest in technology and a very good feeling for the brand and the design."
Like many at JLR, Callum was torn when the takeover became known in early 2008. He hesitates for a moment and then says that one of his employees asked him whether Jaguar might build cars based on the Tata Nano after the takeover by the Indians - Tata Motors was about to make a small, uncomfortable and not exactly safe cheap car to bring to the market. "Ten years ago," says Callum, "I might have been worried about an Indian company. But after we took a closer look at Tata, it was clear that the company could be a good partner for us."
Many people share this view today. The fear that the tycoon from the former British colony might not treat the automotive crown jewels with the respect they deserve turned out to be baseless. Even Britain's largest union, Unite, is recommending that business should follow the example of the auto industry and bring investors like Tata into the country. The Indian group has donated a five-year investment program totaling 6.3 billion euros to JLR. The number of employees has increased from almost 14,000 in 2008 to around 23,000 today. Land Rover and Jaguar sales increased by around 50 percent to 305,000 in fiscal 2011/2012. JLR is profitable and in this period alone made a profit of 1.84 billion euros on sales of 16.8 billion euros.Indian capital plus German efficiency
There are several reasons for its success. The gigantic general store Tata, which has annual sales of around 64 billion euros, keeps its companies on a long leash. The Indians have given the British back their independence - despite tight corporate reporting and profit pressure. This freed forces that were still tied up in the Ford era. For example in design, the use of new materials, the introduction of new production methods, brand management and the internationalization of the company.
A look back helps to understand the development of the past few years. In the 1960s, Jaguar built a dream car with the E-Type. The company was a big name in motorsport, the cars were considered cool and modern. Many other beautiful models followed. But Jaguar got into crisis due to several changes of ownership, a lack of investment and an unclear strategy. Cars of poor quality were produced and accordingly sold poorly; in 1980 there were just 13,000.
In 1989 Ford took over the company, which had been founded in 1922, and combined it with Land Rover, Aston Martin and Volvo to form a kind of bouquet of luxury car flowers, the so-called Premier Automotive Group. The four brands should share research, production and many components. The customer shouldn't notice it and Ford should make good money. That's the plan.
But it didn't open. Jaguar initially sold more cars - but in terms of technology, design and price, they were more of the upper middle class than the luxury class. Ford focused on quantity. A jaguar shouldn't be boring and cheap, but neither should it be really exciting and expensive. As a result, the profit per car sold was modest. Jaguar never made a lot of money under Ford.
And also lost its nimbus. "In terms of appearance, the difference to a Ford Mondeo Ghia is not so earth-shattering that one would have to prefer the Jaguar," said a 2004 driving report for the Jaguar X-Type 2.0 D Sport in the "Frankfurter Allgemeine Zeitung". The two cars were built on the same platform at the time. That wasn't good for the Jaguar brand. The customers ran away in droves. In 2007, with 60,000 cars, less than half as many Jaguars were sold worldwide than in 2002. The trend was steeply downward.
In addition, Ford slid into a crisis with its bread and butter business - cheap mid-range cars for the average consumer in the western world - which resulted in a spectacular loss of ten billion euros in 2006. The group had to be restructured and needed money. The sale of the not very profitable premium car group was quickly decided.
Today Jaguar will again build exclusive cars for well-heeled customers in association with Land Rover. The company should catch up with Porsche, BMW, Audi and Mercedes-Benz. Unlike Ford, Tata lets the brand stand on its own two feet. This is the new plan. But: is Jaguar still able to do this after many years of aberrations and guardianship?
The German Ralf Speth, CEO of JLR since 2010, is convinced: "We make strategic decisions in consultation with the group, but run Jaguar like our own company." The 57-year-old used to be a production expert at BMW for many years and then at Linde. He prefers to talk about numbers and goals rather than about the past. After he took office, there was a big shift in management. Speth brought loyal and confidant people from his previous industrial career to JLR. It is rumored that German was spoken in meetings. The catchphrase of "German efficiency" made the rounds.
Financing is one of the decisive factors for success, stresses Speth. "Tata has given us the opportunity to grow over four years." Among other things, 2.5 billion euros were invested in a factory in Halewood in central England, where the Range Rover Evoque is produced.
Tata had probably just as little expected that so many billions would be needed in the end, as well as the force of the car crisis that set in shortly after the contract was signed. But the Indians were not deterred. They even decided not to close a plant in England, which had already been decided. "Today," says Speth, "we are happy that we still have all the productions because we are working to the limit of our capacity."
Of course, the Tata people are not selfless Samaritans - and their billions are only borrowed. "We have paid back the investment and this year, for the first time, we paid our owners a dividend of 187 million euros," says Speth, unable to hide his pride. "We finance our developments, with which we want to go to the market in the coming years, from the cash flow." 2.5 billion euros will be required for this in 2012 alone.
There is now more freedom and a long-term perspective in sales, too, reports Peter Modelhart. The tall Austrian has been with the company since 2000 and has been running the business in Germany since 2009. "Self-employment is new to us. After the sale, for example, we were asked not only what we want to sell in the coming year, but where we see Jaguar and Land Rover in ten or twenty years." Above all, he sees opportunities for innovative and distinctive cars.
Which brings us back to the head of design, Ian Callum. When he came to Jaguar in 1999, one could spontaneously assign the shapes of an S-Type, X-Type, XK or XJ to the eighties or even seventies. "The models that were new at the time - I don't want to criticize that at all, but that's how it was -" he presses around a little, "just looked like old cars." He was given the task of taking a different direction. "It was clear that Jaguar produced very modern sports cars for the time in the sixties." They wanted to build on this claim again. Callum recalls that the colleagues were skeptical. Some mourned the old style, others said the changes did not go far enough. "We had to design cars in which Jaguar is clearly recognizable - but which cause so much attention with a new design language that they represent a real new beginning."What was sown under Ford is now being harvested
Something like that takes time in the auto industry. It usually takes five years before a new series car goes into production. The first new models that Callum worked on came on the market in 2004 - his first very own design is the XK from 2006. So he is only now gradually reaping the fruits of his work under Ford. "You have to be patient," says he. And apparently Tata has it. "When the Tata people first came to us, they were very surprised at how modern the designs we had in the pipeline were," recalls Callum. And: "They followed the new path that we had taken right away."
Sports car manufacturers today have to meet a wide range of expectations: customers demand horsepower, good design with the lowest possible fuel consumption, governments demand fewer CO2 emissions. JLR therefore relies on lightweight aluminum bodies. The material was already researched under Ford, and now it is being used in series production. "I think I've pioneered more innovations in the third decade of my working life than the first two combined," says Mark White, who has been with Jaguar for 26 years. He is chief engineer for aluminum bodies, the machining of which is all about details. For example, a three-man team examines the finished car body for tiny defects under glaring light. With small lines they mark the places - where the layman cannot see anything. With the F-Type, the fourth aluminum model will be launched shortly.
An important model for Jaguar is the luxury XJ sedan. It is built in Castle Bromwich in hangars that were built in the 1930s for the production of the Spitfire fighter jets. Corrugated iron and brick, on which the camouflage painting against the German airmen of the Second World War can still be seen, dominate the picture. Inside, the production appears much more modern. Five hall-high presses bend the aluminum sheets with strong pressure in a few minutes, punching 60, 70 different holes. At the end of the fully automatic line, a right and a left inner door panel for the Jaguar XJ come out, which are later connected to the other components in another hall with rivets and glue. Production is well utilized in all plants: At Land Rover in Halewood, cars are rolling off the assembly line for the first time ever in three-shift operation.Jaguar is a globalization winner
Another ambitious project is the own drive. JLR used Ford engines in some of its older models, which many felt was inconsistent with the brand. The new F-Type has a drive that Jaguar engineers developed, but which is still produced by Ford. That should change. "The foundation is already in place, we are well on track," says CEO Ralf Speth about the engine factory under construction in Wolverhampton, England. "We're going to invest £ 355 million (€ 440 million) there, creating 750 new jobs." A small re-industrialization of the battered Central English region, where fuel-saving high-performance engines will soon be rolling off the assembly line.
If the boss has his way, you will find plenty of sales. The board of directors launched a product offensive in 2010, and there should be 40 different models by 2015. In the past two years, the company has hired 8,000 new people: blue-collar workers, university graduates, engineers and managers to drive internationalization. Especially in China. "The market is the largest in the world. 18 million cars are sold there," says Speth. "We still have a relatively small percentage there and have not reached the limits of our growth."
Brands such as Audi, BMW and Mercedes-Benz are far ahead of the British in China, but Jaguar is making progress: In the past two financial years, the number of models sold rose from 2,800 to 7,100 The British think that is only possible in the form of a joint venture with a Chinese partner. A first agreement has been signed with the Chinese manufacturer Chery. Jaguar Land Rover also wants to expand to Brazil in order to assemble finished car parts there. Both deals are not yet dry.
A rainy evening in Paris at the end of September. Jaguar presents the F-Type sports car at the Mondial de l'Automobile, the world's largest motor show. In the garden of the Museé Rodin, a rococo building not far from the Seine, there is a huge tent. A DJ plays British classics by The Smiths and Madness, then Lana del Rey in a white dress sings her hit "Video Games" as well as a specially composed song for the F-Type. Ralf Speth smiles all evening.
The CEO is satisfied with the debut of the car, which will continue Jaguar's two-seater sports car tradition. These are toys for people who have to spend at least 73,400 euros on them: a target group that is growing worldwide and that has largely bypassed the crisis. That's one of the reasons why Jaguar Land Rover doesn't think too much about the currently falling sales figures in Europe. The forecast institute IHS assumes that JLR will sell around 500,000 cars in 2015 - if the entire global economy does not fall into a deep crisis. In the first quarter of this financial year, both brands found around 83,000 buyers.
Ratan Tata has also come to Paris. At the premiere of the F-Type, the Indian is clearly amused in the front row. But he doesn't make a speech - and discreetly holds back himself.
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