The Tata Group Chairman Ratan Naval Tata has termed the acquisitions of the British marquees Jaguar Land Rover as 'strategic' and 'worthwhile' and said the company will strive to bring the old glory of the brands.
He also said that JLR is likely to continue importing into the country rather than setting up an assembly line here.
In an interview to The Wall Street Journal, the 71-year old Tata Group patriarch said, "If we assume that the global meltdown is a phenomenon that will be over in the near term, I think we will look back and say that these (JLR & Corus buys) are very strategic and worthwhile acquisitions."
The Tatas had acquired Jaguar Land Rover (JLR) from Ford Motor for $2.3 billion last year. The salt-to-software conglomerate had pumped more than 1.2 billion pound into these iconic British brands since then to keep the plants running amidst declining sales. It bought Corus Steel for close to $13 billion three years ago.
"There were many questions raised regarding whether these two large acquisitions -- Corus and JLR -- are worthwhile and whether the prices were right in terms of being at the top of the market, virtually. My view on that is that if you want to buy a house and that house is of a particular value, then it may not be there if you wait," Tata said.
He said the JLR acquisition gave the Tatas international brands, which would have otherwise taken "many years and billions of dollars" to establish in foreign markets. "We have been careful not to try to create a gravy out of this one and sort of merge it with Indian operations. We have brands to nurture and hopefully bring back to their former glory," Tata added.
About JLR's India plans, he said: "We have one retail outlet in the country and it is just imports against orders.
It will never be the same until we look at another phase where there would be assembly in India, which in turn will depend upon the interest level and the ability of JLR to make that commitment to invest in India."
He said the company will, for the time being, continue to import JLR models to India. "I think JLR would at present moment continue to just look at importing to India and look at improving and securing its position in the territories in which it is strong," Tata said.
Admitting that the acquisition of JLR hit the company's financial position, he said it was able to repay borrowings worth $3 billion by raising new capital, liquidating assets and cost cutting. Regarding doubts in the British trade union circles about the JLR deal, Tata said the company received support from the workforce at the British plants.
"The only area I think where we had some explaining to do or clarifying to do was the apprehensions that we would move manufacturing facilities to India and that was easy to put to rest as that was never our intention," he said.
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