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Tata and Jaguar
Monday October 1, 4:05 pm ET

At a recent awards ceremony in Mumbai for Indian companies investing in the UK, the Tata Group won "Investor of the Year". That is little wonder. Cash-rich Tata, one of India's largest private conglomerates, has already done Britain a service by taking over and promising to rejuvenate steelmaker Corus. Now it is considering acquiring another struggling legacy company - Jaguar, the lossmaking marque being sold alongside Land Rover by Ford (NYSE:F).

Tata has the estimated $3bn required to buy Jaguar and Land Rover. The group's automotive unit, Tata Motors (NYSE:TTM), India's third largest carmaker, is virtually debt-free after stripping out its vehicle finance business. The problem is how such an acquisition fits with Tata's strategy of developing low-cost cars for emerging markets. Tata already faces challenges with a project to develop the world's cheapest passenger vehicle, the "one lakh car". This will retail at about $2,500. But rising raw material costs are hampering the project.

Tata is also fighting market share declines in its domestic car business. Analysts worry that consumers are growing tired of Tata's ageing models and sales service - the group ranked at the bottom of JD Power's Asia Pacific 2007 India sales satisfaction index study. This is not a great starting point for acquiring two top luxury brands. But the British marques would give Tata greater international distribution, a broader product range and might help enhance its customer service skills.

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UK is being gobbled up by its former colonies. From Americans, to Indians, to everyone in between, everyone wants a piece of the UK action. Oh Boy.. The English need to rethink their economy.
 
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