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Tata Motors, JLR to Share Skills for Engine, Vehicle Development

By Motortrend India Staff   |   11 July,2010

Tata Motors has kick-started a move to jointly develop engines and vehicles with its UK subsidiary, Jaguar Land Rover, more than two years after its $2.3-billion acquisition of the British marques.

“Initiatives have been taken on joint development programmes for engines, vehicles and platforms, which would leverage skills of the company (Tata Motors) and Jaguar Land Rover, resulting in a synergy in operations of the company and its subsidiary,” Tata Motors said.

The company informed its shareholders about the development, and sought their approval for raising up to Rs 4,700 Crore in long-term funds. Tata Motors had acquired the two iconic brands from Ford in 2008 for $2.3 billion.

The company singled out the role played by its non-executive vice-chairman, Ravi Kant, in bringing about synergies between Tata Motors and JLR. In recognition of his achievements, the company’s board approved a remuneration of about Rs 53 Lakh per annum for Mr Kant.

“As vice-chairman, he (Kant) has been performing a key function in overseeing and co-ordinating the operations of JLR, besides reviewing the existing manufacturing processes, which would result in substantial cost reduction and rationalisation of platforms,” the firm said.

As part of its strategy to expand the company’s domestic and global footprint, Tata Motors had announced that it would invest about Rs 10,000 Crore in the next two to three years on product development, facility modernisation and other capex purposes.

Earlier, JLR had announced plans to increase sourcing of components from low-cost countries, including China and India, in the coming years to reduce input costs. “Material cost is a significant challenge and JLR previously said that over the next few years it will grow the amount of materials and components it purchases from lower-cost countries,” a JLR spokesperson had said.

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