Tata Motors Ltd, owner of the Jaguar and Land Rover brands, is being forced to search for a new chief executive officer as it struggles to revive sales of the luxury sedan amid a worsening debt crisis in Europe.
Carl-Peter Forster, 57, who helped the Jaguar Land Rover unit turn to profit in the year ended March 31, quit on September 9 after less than two years as the global head of India’s biggest automaker citing “unavoidable personal circumstances.” Forster’s replacement will face the challenge of reversing six straight months of declining sales at Jaguar. Tata Motors, which last year got 35 percent of its revenue from the US and Europe, needs to find a head for the company soon to avoid derailing a plan to invest $2.4 billion annually in new models and expanding into China.
“They are going to be left wondering who is going to replace him,” said Andrew Jackson, an analyst at research firm Datamonitor in London. “This is a big blow really for Jaguar Land Rover. He signed off on a very bold change in direction for the company.”
Prakash Telang, managing director of the company’s Indian operations, and Ralf Speth, chief executive officer of Jaguar Land Rover, will represent their respective units on Tata Motors’ board, according to an e-mailed statement on September 9. The company’s shares have dropped 44 percent this year, making it the worst performing stock in the Sensex.
Forster presided over a 20-fold jump in Jaguar Land Rover’s profit before tax in the year ended March 31. He also led Tata Motors plan to tap China. China is the No. 1 growth market for Jaguar Land Rover, Forster said in a Bloomberg TV interview in May. Tata Motors is looking for a local partner in China to set up assembly operations in the country, and the company has shortlisted manufacturers, Forster said in a separate interview the same month, without naming any of the potential partners.
Forster helped by “pulling Jaguar and Land Rover out of the mud and making them profitable,” said Peter Schmidt, MD of Automotive Industry Data. “It will be very difficult to replace him in the short term, and possibly in the long term.” The JLR unit, based in Gaydon, England, generated 57 percent of Tata Motors’ revenue for the year ended March 31, up from 53 percent a year earlier, The division’s pretax profit surged 20-fold to £1.12 billion for the fiscal year.