Tata acquires Jaguar, Land Rover for US$ 2.3 billion

INDIA: India's Tata Motors said yesterday it had bought British luxury icons Jaguar and Land Rover from struggling US carmaker Ford for 2.3 billion dollars as it expands its global reach.

"We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business," Tata group chairman Ratan Tata said, pledging to keep the identities of the famous brands "intact".

Tata Motors, part of the sprawling tea-to-outsourcing Tata Group empire, said the "total amount to be paid in cash" would be 2.3 billion dollars and added Ford would contribute up to about 600 million dollars to the Jaguar and Land Rover pension plans.

The purchase, which has been the subject of speculation for months, comes amid an economic downturn which has put the squeeze on demand for prestige vehicles.

In January, Tata unveiled the Nano at a price of 2,500 dollars, hoping that the no-frills auto could revolutionise travel for millions in India and elsewhere. But with the acquisition, Tata would be in the unusual position of making the cheapest car in the world as well as some of the most expensive.

Of late, tough global economic conditions have put sales of expensive cars into reverse. US and European sales of Jaguar fell by over 30 percent, year-on-year, during the first two months of 2008.

The company is looking at making a major technological leap by gaining access to the sophisticated engines of Land Rover and Jaguar. AFP