A

Project Report
on
“Acquisition of JLR by TATA”

Submitted to:
Auro University, Surat, Gujarat, India

Under the Guidance of:

Dr. Monika Suri
(Associate Professor)

In partial fulfillment of the Requirements for the Degree of

Master of Business Administration (MBA)

Subject:
International Marketing

Offered By:
Auro University, Surat

Prepared by:
Abhilasha Agarwal
Satyanshu Sharma
th
(Block 7 , Semester IV, MBA 2017-19)

Page 1
TABLE OF CONTENT
Abstract ............................................................................................................................................ 4
1. Introduction to International Marketing ........................................................................................ 5
1.1 How to Enter the International Market? ...............................................................................................5

2. Introduction to Company with acquisition POV .............................................................................. 7

3. Nature of Acquisition of JLR by TATA Motors ................................................................................. 8
3.1 Reasons behind Ford Motor’s Decision to sell JLR .................................................................................8
3.2 The rationale to acquire JLR .................................................................................................................8

4. International Marketing Environment after Acquisition ............................................................... 10

4.1 SWOT Analysis ................................................................................................................................... 10
4.2 Porter’s Five Forces ............................................................................................................................ 10
4.3 PEST Analysis ..................................................................................................................................... 12

5. Market Entry Strategies .............................................................................................................. 15

6. Global Product Strategies ............................................................................................................ 17
6.1 Product Innovation ............................................................................................................................ 17
6.2 Product Description ........................................................................................................................... 17
6.3 Aluminum Body ................................................................................................................................. 17
6.4 Environment Friendly Paint ................................................................................................................ 17
6.5 Bio Fabric Seats.................................................................................................................................. 18
6.6 The Futuristic Plastic Interiors ............................................................................................................ 18
6.7 Eco-friendly Tyres .............................................................................................................................. 18
6.8 Coolants ............................................................................................................................................ 19
6.9 Hydrogen Technology ........................................................................................................................ 19
6.10 Product Planning.............................................................................................................................. 21
6.11 Product Mix ..................................................................................................................................... 22

7. Global Pricing Strategies ............................................................................................................. 24

8. Integrated Marketing Communication ......................................................................................... 25
8.1 Marketing Mix ................................................................................................................................... 25

9. Change in Marketing Strategies................................................................................................... 29

9.1 TATA’s advertising in its early years .................................................................................................... 29
9.2 Advertisement of JLR ......................................................................................................................... 39

Page 2
10. International channels of Distribution & Logistics ...................................................................... 46
11. Role of WTO in acquisition ......................................................................................................... 55
12. Recommendations ..................................................................................................................... 57

Page 3
Abstract
In June 2008, India-based Tata Motors Ltd. announced that it had completed the
acquisition of the two iconic British brands - Jaguar and Land Rover (JLR) from the US-based
Ford Motors for US$ 2.3 billion. This acquisition would help the company in several ways, to
get a global footprint and enter the high- end premier segment of the global automobile
market. Now the Tata Motors would own the world's cheapest car - the US$ 2,500 Nano,
and luxury marquees like the Jaguar and Land Rover.

In the Competitive market for attaining the Success, one needs to be a global player to
manage the business risk and company need to be strategies themselves based on its
internal strengths & external opportunities and Tata Motors acquisition of Jaguar and Land
Rover is an unique example for this. Tata Motors wanted to expand its product portfolio
and diversify its market base.

According to industry analysts, some of the issues that could trouble Tata Motors were
economic slowdown in European and American markets, funding risks, currency risks etc. In
the 10 months post-acquisition, sales volumes plunged 32% and the unit recorded a loss of
281 million pounds ($461 million). Tata's total debt in March 2009 rose to 435.8 billion
rupees ($9.72 billion), nearly double what it owed in the previous fiscal. In such scenario
the question generated about the acquisition decision of Tata motors is right or wrong. This
report is an attempt to critically analyze that the decision taken by Tata Motors about
acquisition of Jaguar Land Roar two iconic brands was the right decision & other different
aspects.

Page 4
1. Introduction to International Marketing
The International Marketing is the application of marketing principles to satisfy the
varied needs and wants of different people residing across the national borders.

Simply, the International Marketing is to undertake the marketing activities in more than
one nation. It is often called as Global Marketing, i.e. designing the marketing mix (viz.
Product, price, place, promotion) worldwide and customizing it according to the
preferences of different nation people.

The foremost decision that any company has to make is whether to go international or not,
the company may not want to globalize because of its huge market share in the domestic
market and do not want to learn the new laws and rules of the international market.

But however, there are following reasons that attract the organization to be global:
 Increased Economies of Scale
 High-profit opportunities in the international market than the domestic market
 Huge Market Share
 Elongated life of the product
 Untapped International Market

1.1 How to Enter the International Market?

1.1.1 Exports
The easiest way to enter the market is through exports that can be indirect or direct. In
Indirect Exports, the trading companies are involved that facilitates the buying and selling
of goods and services abroad, on the behalf of the companies.

Whereas in Direct exports, the company itself manages to sell the goods and services
abroad, by opting one of the following ways:
 By setting Domestic based Export Department, working as an independent entity
 Through Overseas sales branch, that carries out the promotional activities and facilitates
sales and distribution.
 The sales representatives traveling abroad
 The distributors or agents in abroad working exclusively on the behalf of the company

1.1.2 Global Web Strategy

Nowadays, companies need not go to the international trade shows to show their products,
they can very well create the awareness among the customers worldwide through an
electronic media i.e. internet. Through the company website, customers can read the
Page 5
detailed information, generally written in different languages, about the product and can
order online.

1.1.3 Licensing and Franchising

One of the ways to globalize is through licensing, wherein the domestic company issues the
license to the foreign company to use the manufacturing process trademark, patent, name
of the domestic company while facilitating the sales. In licensing, the domestic company
has a less control over the licensee.

But, in the case of franchising, the domestic company enjoys the higher control as it allows
the franchise to function on its behalf, and in line with the terms and conditions of the
domestic company. MC Donald’s, Dominos are the examples of franchising.

1.1.4 Joint Ventures

The companies can go international by joining hands with other country based companies
with the intention to monetize their existing relationships with the local customers. In
India, TATA AIG, HDFC standard life insurance, TATA Sky are the examples of joint ventures.

1.1.5 Direct Investment

Ultimately, the firms can establish their own business facilities or own a part of the local
company to facilitate the sale of goods and services.

The companies go international with the objective to have increased sales along with the
huge market share. But certain things such as political, social, technological, cultural
situations should be kept in mind while designing the marketing principles since these are
different for the different nations.

Page 6
2. Introduction to Company with acquisition POV
The automobile industry in India is one of the most successful stories of post liberalization
manufacturing space in India and entirely based on prudent policy support of the
Government. However, the recent economic changes have not only been unfavorable but
they have been inhibitor for the automobile industry. Some of the critical factors which are
affecting the automobile sector are GDP, inflation rates, interest rates, Exchange rates
along with the some qualitative factors like recession. These factors are continuously
changing which affect the demand of the product. In such scenario only strong strategies
will help the company to survive in market.

Tata motors strategy of diversification, acquisition, and merger will be a best example for
the survival and growth. This report covers the Strategy adopted by Tata motors to enter
into premium class segment by acquiring Jaguar Land Rover. Although the company was in
trouble right after the acquisition of Jaguar and Land Rover (JLR) in June 2008 due to the
arrival of global financial crisis. The bridge loan of US$ 3 billion which used to fund the
acquisition of JLR was due on June 2009 and yet at the end of the year 2008, Tata was only
able to repay the US$ 1billion. The declining revenues and a tight credit conditions was
hurting the company’s cash flow. But due to the management competencies & changing
economic situation help the company to not only to overcome the situation but also to
grow.

Page 7
3. Nature of Acquisition of JLR by TATA Motors
3.1 Reasons behind Ford Motor’s Decision to sell JLR
"Acquisition of JLR provides the company with a strategic opportunity to acquire iconic
brands with a great heritage and global presence, and increase the company's business
diversity across markets and product segments." - Tata Motors, in April 2008

In 2006, reports said that losses at Jaguar stood at USD 715 million. Jaguar was not
performing well as it was unable to provide any profit for Ford due to high manufacturing
costs in United Kingdom. Bringing down production costs and turning around the company
successfully will be the challenge for the company. That was the reason Ford was ready to
sale the JLR at half of the price.

Tata take this as an opportunity to enter into premium class segment to take an advantage
of demographic dividend of India because of the double digit GDP growth during that
period. Company have an assumption that the situation may last for few years and
disposable income of people may increase which help the company to diversify their
business in India into premium class segment. But due to economic slowdown not only
world market but also Indian market get affected and Tata Motors was in trouble.

3.2 The rationale to acquire JLR

On acquiring JLR, Ratan Tata, Chairman, Tata Group, said, "We are very pleased at the
prospect of Jaguar and Land Rover being a significant part of our automotive business. We
have enormous respect for the two brands and will endeavor to preserve and build on their
heritage and competitiveness, keeping their identities intact. We aim to support their
growth, while holding true to our principles of allowing the management and employees to
bring their experience and expertise to bear on the growth of the business."

Tata Motors stood to gain on several fronts from the deal.

 The acquisition would help the company to enter in to the high-end premier segment of
the global automobile market.
 Tata also got two advance design studios and technology as part of the deal. This would
provide Tata Motors access to latest technology which would also allow Tata to improve
their core products in India
 The cost competitive advantage as Corus was the main supplier of automotive high grade
steel to JLR and other automobile industry in US and Europe. This would have provided a
synergy for TATA Group on a whole.

Page 8
 In the long run, TATA Motors will surely diversify its present dependence on Indian
markets (which contributed to 90% of TATA’s revenue). Along with it due to TATA’s
footprints in South East Asia will help JLR do diversify its geographic dependence from US
(30% of volumes) and Western Europe (55% of volumes)

Page 9
4. International Marketing Environment after
Acquisition
4.1 SWOT Analysis
4.1.1 Opportunities
 Demand of luxury automobiles in growing markets like India and China
 Support from Jaguar in Technology
 Complete product line with addition of luxury brands
 Access to European and American Market

4.1.2 Threats
 Volatility in market driven by new products
 Strong presence of competitors like Mercedes, BMW, Lexus and Infinity
 Receding sales and brand image
 High interest rate Investment riskier and costlier

4.1.3 Strengths
 Tata’s strong management capability
 Strong monetary base to invest
 Synergy due to Corus, TACO and TCS
 Experience in growing market like India
 New product development and brand building experience

4.1.4 Weaknesses
 Inexperience in Handling luxury automobile brand

4.2 Porter’s Five Forces

4.2.1 Barriers to entry
Economies of Scale: As our new launch of Jaguar XH requires high capital investment for
the manufacturing of our new car which is environmental friendly and targeting a specific
segment of the market .So the risk of new entrant is high as other big players might try to
imitate the same concept.

Knowledge and Technology: The ideas and knowledge that provides competitive advantage
over others is its unique hydrogen-based technology which creates barrier to entry.

Page 10
Product Differentiation: As the new product has to be different and accepted by the
customers. So, we are providing our customers with the expected attributes of premium
luxury cars.

Access to Distribution Channels: A well developed distribution is must for its success when
a new product is launched in the market. So we will take advantage of well established
TATA Motors channels across the world.

4.2.2 Buyers
Switching Cost: As it is first of its kind, so they have no options to switch over.

Number of Customers: The bargaining power of buyer is low as there we have mentioned in
our switching cost that there are barriers to new entrants. There is no forward integration
of buyers.

Brand Image: the Jaguar Land Rover already has an established Brand Image as a
manufacturer of premium luxury cars.

4.2.3 Suppliers
Bargaining Power of Suppliers: Bargaining Powers of suppliers is less.

4.2.4 Threat of Substitutes

Price Brand: The threat that consumer will switch to a substitute product is very low.

Buyers Willingness: The willingness of the customers to buy this product will be because of
the higher efficiency and good quality of an eco-friendly premium luxury car.

4.2.5 Competitive Rivalry

Number and Diversity of Competitors: This means the amount of competition in the car
industry which appears to be in the luxury cars such as BMW & Mercedes in Europe, Lincoln
and Cadillac in U.S.

Exit Barriers: If the new product fails in the market then it is not easy for the company to
exit because of the involvement of huge capital investments.

Product Quality: To maintain its new generation premium luxury car the company has to
make manufacturing improvements continuously to further keep uplift its quality.

Page 11
4.3 PEST Analysis
4.3.1 Political Factors
Since Tata Motors operates in multiple countries across Europe, Africa, Asia, the Middle
East, and Australia, it needs to pay close attention to the political climate but also laws and
regulations in all the countries it operates in while also paying attention to regional
governing bodies. Laws governing commerce, trade, growth, and investment are
dependent on the local government as well as how successful local markets and economies
will be due to regional, national and local influence.

On March 26, 2008, Tata Motors reached an agreement with Ford to purchase Jaguar and
Land Rover. In order to be capable of this acquisition, Tata Motors must have a full
comprehension of the governing bodies and laws regulating commerce in the home
country, the United Kingdom, but also in countries, Jaguar and Land Rover operate in. In
accordance, Tata’s headquarters in Mumbai, India, strictly controls and regulates
operations in all dealerships and subsidiaries, in addition to knowing and abiding by all
labor laws in the multiple countries where they have manufacturing plants it has to watch
political change. This will be especially vital in the future as Tata Motors continues to
expand and grow into new markets. “While currently about 18% of its revenues are from
international business, the company's objective is to expand its international business, both
through organic and inorganic growth routes”. The foundation of the company’s growth
internationally is a deep understand of economic stimulation, customer needs, and
individual 5 government regulations and laws. Although it is the headquarters ultimate
responsibility to make sure each individual office and branch is operating and abiding by
the local laws, it will become increasingly more important for that duty to be taken care of
at the regional or even local level.

4.3.2 Economic Factors

Operating in numerous countries across the world, Tata Motors functions with a global
economic perspective while focusing on each individual market. Because Tata is in a rapid
growth period, expanding or forming a joint venture in over five countries worldwide since
2004, a global approach enables Tata Motors to adapt and learn from the many different
regions within the whole automotive industry. They have experience and resources from
five continents across the globe, thus when any variable changes in the market they can
gather information and resources from all over the world to address any issues. For
instance, if the price of the aluminum required to make engine blocks goes up in Kenya,
Tata has the option to get the aluminum from other suppliers in Europe or Asia who they

Page 12
would normally get from for production in Ukraine or Russia. Tata Motors also has to pay
close attention to shifts in currency rates throughout the world. Currency fluctuations can
equate to higher or lower demands for Tata vehicles which in turn affect profitability. It can
also mean a rise in costs or a drop in returns. But they also have to pay attention to not just
the domestic currency, the rupee, but also to the dollar, euro, baht, won, and pound, to
just name a few. Just because the rupee is strong against the dollar does not mean it is
strong against all the other currencies. Attention to currency is important because it
influences where capital investment will develop and prosper.

4.3.3 Social Factors

Undoubtedly, the beliefs, opinions, and general attitude of all the stakeholders in a
company will affect how well a company performs. This includes every 6 stakeholder from
the CEO and President, down to the line workers who screw the door panel into place, from
the investor to the customer, the culture and attitude of all these people will ultimately
determine the future of a company and whether they will be profitable or not. For this
reason, Tata Motors tends to use an integration and rarely separation technique with
foreign companies they acquire. On the other hand, some economic issues that Tata
Motors face must also be looked at from a more localized perspective. For instance, the
market in India for cars is much different than the market for cars in Italy. For one, India has
over one billion more people than Italy does, thus the market is much larger or not as
limited. Second, you must also take into affect the demographics and the average income
of each market. Italians have a higher average income per capita than Indians and Italian
citizens tend to drive larger and fancier cars. For this reason, the Tata Nano might not do so
well in the Italian market. In summation, Tata Motors views the economy from a global
perspective with operations across the entire globe; however, they must also maintain a
local market understanding and knowledge when it comes to product positioning and
placement throughout the different markets Tata conducts business in. In 2004, Tata
Motors acquired Daewoo Commercial Vehicles Company, which was at the time Korea’s
second largest truck maker. Rather than using de-acculturation or assimilating Daewoo,
Tata took an integrated approach, and continued building and marketing Daewoo’s current
models as well as introducing a few new models globally just as it had been done under
Korean management. With the new acquisition of Jaguar and Land Rover, Tata will have to
be careful with how they handle the acquisition. While Land Rover is thriving while under
the helm of Ford, Jaguar was more of the trouble child. “Jaguar cost Ford some $10 billion
during its 18-year stewardship and its sales were in headlong decline, especially in America,
its most important market. Industry analysts also struggled to see what value Tata could

Page 13
add that had eluded Ford, and what synergies there could be between a maker of trucks
and basic cars and two luxury marques.” Separation could be a good approach for the
immediate future 7 to keep the name of Jaguar and Land Rover distinguishable and
associated with the luxury automobile market. Overall, Tata does a good job of integrating
some aspects of their large multi-national conglomerate into new acquisitions; however,
the company must also understand that separation from the name Tata can be valuable in
some social areas.

4.3.4 Technological Factors

Tata Motors and its parent company, the Tata Group, are ahead of the game in the
technology field. The Tata Group as a whole has over 20 publicly listed enterprises and
operates in more than 80 countries worldwide. This equates to Tata Motors having many
experience and resources to draw from for research and development purposes. “The
foundation of the company’s growth is a deep understanding of economic stimuli and
customer needs, and the ability to translate them into customer-desired offerings through
leading edge R&D”. Employing 1,400 scientists and engineers, Tata Motors’ Research and
Development team is ahead of the pack in India’s market and right with the rest of the field
internationally. Among Tata’s firsts are “the first indigenously developed Light Commercial
Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica, India's first fully
indigenous passenger car,” as well as the increasingly famous Tata Nano, which is projected
to be the world’s cheapest production car (Tata). In the automotive industry, it is becoming
increasingly crucial for manufacturers to stay on top of the technology curve with new
problems always rising such as escalating gas prices and pollution problems. Tata
recognizes this and dedicates lots of resources and time into research and development to
be even with or preferably ahead of other competitors, global trends, and changing
economies. In all, an automobile manufacturer must change, adapt, and evolve to stay
competitive in the automotive game, and this is exactly what Tata is doing with their rapid
growth, and extensive research and development.

Page 14
5. Market Entry Strategies
Jaguar and Land Rover made their India entry a year or so after Tata Motors took over the
iconic luxury British brands. Beginning with the assembly of the Freelander 2 at a plant in
the premises of its parent company, the company now makes four models in India and
plans to bring in more.

Jaguar Land Rover was launched in India in June 2009. Since then, the industry has grown
three-fold & company has seen our volumes grow circa 15-fold.

Despite not being present in the sub-40 lakh segments of premium hatch-backs, small
sedans, compact sedans and SUV’s, which form around 40-50 per cent of the premium car
industry, company enjoys 8-9 per cent market share in the overall premium car market and
around 14-15 per cent share in JLR relevant segments.

So, yes, it can be said that the company has managed to well establish JLR in India.

Company’s circa 15-fold growth since FY ‘09-‘10 may be attributed to a number of factors
like establishing leading after-sales service network across India, building parts warehouse
with high fill rates to be able to service customer requirements promptly, focus on service
and sales staff training and expansion of local manufacturing footprint and providing more
product choice to customers.

With key product launches like Discovery Sport and Jaguar XE this fiscal year, company shall
continue this product offering and are targeting yet another year of growth.

Overall, company provides customers in India a choice of over 30 different

engines/derivatives. The Jaguar range in India includes locally manufactured XF and XJ and
F-Type (CBU form) with prices ranging from 42.5 lakh to 124.75 lakh.

The Land Rover range includes locally manufactured Freelander 2 and Range Rover Evoque
and CBU forms of Discovery, Range Rover Sport, and Range Rover. The prices range
from 41.06 lakh to 181.6 lakh. The split between them is roughly 50:50.

Company locally manufactures four models at the plant in Pune — Freelander 2, Range
Rover Evoque, Jaguar XF and Jaguar XJ. Production at the Pune plant has grown multi-fold
since its inauguration in 2011 and the local manufacturing of Range Rover Evoque in the
facility early this year, comes as part of Jaguar Land Rover’s plans to expand its
manufacturing footprint globally, increasing its production capacity outside of the UK.

Page 15
Jaguar Land Rover has a global approach to quality to ensure consistent levels are achieved
at all manufacturing plants and the same quality systems and standards are applied and
achieved in India plant operations as well.

Jaguar as a brand has done extremely well in India and Jaguar XE will take this success to
the next level. Jaguar XE is a unique vehicle with segment first Aluminum-intensive
monologue design. By virtue of its desirable proposition, the XE will enable us to target a
whole new industry segment and make the Jaguar brand more accessible. Company is
extremely positive about the XE in India and is confident about maximizing its sales. Jaguar
XE is expected to be launched in India in early 2016.

Company has a network of 21 retailers across 20 major cities in India and plans to expand
the network to 22-23 outlets by the end of the calendar year. (Kshirsagar, 2015)

Page 16
6. Global Product Strategies
6.1 Product Innovation
According to the analysis conducted above Jaguar has the back up of financial and
technology resources to innovate and make its way back into the premium selling business.
Our idea of innovation is to come up with a commercially applicable technology in the
highly competitive world automobile industry. Hydrogen cars are making headway in the
R&D centre of many automobile giants. Our innovation is to come up with a high-end
environmental friendly car, which can be commercially viable technology for high-end
buyers to spend. The idea generated by our group is to come up with a product, which not
only has a hydrogen engine but all the other components used in the car are environment
friendly. This includes the seats, tyres, aluminum body, reduction in pollutants etc. Unlike
other manufacturers we recommend to launch a high end product. The reason for this is to
target our new technology to customers that are willing to pay the price for a better, faster
and an environmental friendly car.

6.2 Product Description

We have named our product as the Jaguar XH (H for hydrogen). The hydrogen technology is
chosen for 3 reasons first being the fact the new innovative technology of hydrogen cars,
which is gaining momentum in the automobile industry. Secondly, this technology can give
Jaguar and TATA the competitive advantage they need to gain back their lost brand
awareness. And lastly, the awareness of the overall environmental impact in the
automobile industry has been growing as European and U.S. regulations, e.g. for vehicle
emission, have become more stringent.

6.3 Aluminum Body

A car’s body makes up around 25% of its total weight, so Jaguar uses aluminum wherever
possible to make weight savings. And because the body is lighter, the braking and
suspension components do not need to be as big, equaling more weight saving. The
aluminum body developed by Jaguar helps in its cars to become lighter and faster.
Aluminum technology also makes the cars safer meeting increasingly safety requirements.
All the body parts including the nuts and bolts are made of aluminum reducing the car
weight considerably. (Power aluminum)

6.4 Environment Friendly Paint

Painting vehicles has in the past been one of the auto industry’s biggest environmental
challenges stated by Mary Ellen Rosenberger. We are planning to develop paint; which is

Page 17
environment friendly. The technology will combine an advanced chemical formulation,
which will be made of high-solids, solvent- borne paint. The high solids, solvent borne paint
helps to produce fewer volatile organic compounds (VOC) and CO2 emissions than the
water borne and current solvent-borne paints. The innovative three wet coating which, are
to be applied on the vehicle, are on top of the other, without any drying time during the
coats. Doing this will reduce the process in painting, which will lead to a smaller and more
efficient paint shop. There are high hopes for this technology and it is estimated that doing
this will help save about $7 per vehicle by cutting the time it takes to paint and will even cut
back the CO2 and VOC emissions by 10 percent. Even environmentally it will cut down the
greenhouse gasses by 15 percent (Auto week).

6.5 Bio Fabric Seats

Bio fabric helps in reducing co2 emissions because it is made from plants. It concerns about
durability, it is not only smooth and soft to touch but also has long life. It is ideal for seats
covers, door trims, floor mats and some more. It is produced in the same way as polyester
materials, which is petroleum, based, so basically there is no need for the special
technology. Main difference is that they take 10 to 15% less energy to make and save up to
30% in co2 emissions and co2 is emitted when the car is disposed. (Honda)

6.6 The Futuristic Plastic Interiors

We plan to implement environmental-friendly wheat straw-reinforced plastic in our vehicle.
It’s just the third-row interior storage bins made from the natural fiber-based plastic that
contains 20 percent wheat straw bio-filler, this application alone reduces petroleum usage
by some 20,000lbs per year, cuts CO2 emissions by 30,000lbs per year, and represents a
smart, sustainable usage for wheat straw, the waste byproduct of wheat. Wheat straw-
reinforced resin has many advantages over non-reinforced plastic, which is currently used
by most of the auto companies. It has better dimensional integrity than a non-reinforced
plastic and weighs up to 10 percent less than a plastic reinforced with talc or glass. We will
consider center console bins and trays; interior air register and door trim panel
components, and armrest liners to be made from the wheat straw-based plastic. We
recommend the usage of such materials for the Jaguar XH. (Gizmag.com)

6.7 Eco-friendly Tyres

Bridgestone ECOPIA EP150 eco-friendly tyres will be used in the car Jaguar XH.

These low rolling resistance tyre combines high-level wet safety with lower fuel
consumption and CO2 emissions. These tyres meet the challenging objective of combining

Page 18
top-class wet safety with reduced rolling resistance, leading to higher fuel efficiency and
lower CO2 emissions.

These Bridgestone tyres are made of materials technology called NanoPro-TechTM

combined with a new tread design. NanoPro-TechTM produces a lower rolling resistance by
reducing energy loss in the top compound during rotation. The new tread design features
thin rib and a connected block by which contact pressure and wet braking performance is
enhanced.

ECOPIA is Bridgestone’s flagship brand that helps to increase vehicle energy efficiency and
thus contributes to the prevention of global warming. This is achieved by tumbling rolling
resistance and/or saving resources whilst maintaining various performances needed of
tyres, especially advanced safety performance. (News Market)

6.8 Coolants
Hydro chlorofluorocarbons (HCFCs) are compounds made up of hydrogen, chlorine,
fluorine, and carbon atoms. HCFC’s are a substitute to CFC’s that are used as a coolant in
refrigerators, aerosols, cars, etc.

Earlier CFC’s were used as a coolant and because it had classes of compounds that used to
deplete the ozone layer, HCFC’s are now used as a substitute and are not as harmful as
compared to CFC’s.(Science J rank)

6.9 Hydrogen Technology

The Jaguar XH is a car which is good for the environment. For the very first time, this car
will be sold to the direct customer on a full scale basis and will be the most environment
friendly car in the world.

Based on the same design that is currently being used by Honda FCX Clarity, the Jaguar XH
will use a hydrogen tank that will pass hydrogen through a battery and produce energy
which will in turn run the motor of the car. This car uses no gas of any kind and hence does
not leave any harmful pollutants. Hydrogen is stored in a tank and is then passed through a
fuel cell which combines hydrogen and oxygen to produce electricity. The vehicle is then
propelled by an electric motor which leaves behind only clean water vapor behind hence
making it a zero omission vehicle.

Source: Honda Clarity

Page 19
However, as compared to petrol, hydrogen does not affect the environment in any way
possible and the only emission that is released is water vapor. So even though hydrogen
may be very environment friendly, it simply fails to produce as much as energy as petrol
can give. In other words, the car will not run as fast as it does when petrol is being used.

There are a couple of innovative strategies that can be used in order overcome this barrier
of speed and efficiency. We propose to design and make the car more aerodynamic and
sleek and made of aluminum. Aluminum is used as it is lighter than steel and is strong as
well.

Although the estimate cost to setup one large hydrogen fuel station would cost about $1.16
million approximately (Energy independence), we do not plan to set these up during the
initial years till we see a marginal increase in our sales for jaguar XH or other companies
may want to join partnership and build the hydrogen fuel stations in different parts of
every city. Our proposed business strategy would be to set up a huge hydrogen fuel
stations in different parts of the country based on a location strategy. For example: there
would be 8-10 hydrogen fuel plants in different parts of UK. For example: London, Bristol,
Manchester, Birmingham, Newcastle, Edinburgh, etc. The diagram shown below,
demonstrates as to how hydrogen will be produced at each of our plants.

Source: Argonne National Laboratory

Our strategy is to deliver fuel to our customers rather than them coming to us and
refueling. By strategically placing these 10 stations all over UK, we would be able to deliver
fuel to our customers much more efficiently and effectively. Although this may sound a
little strange, there is a logical reasoning behind this strategy. To set up each fuel pump
(small) across the country would cost approximately $253,000 which is exorbitant (Energy
Independence). So in order to save up a lot on cost, we plan to just set up 8 to 10 factories
in strategic locations. Now our customers do not need to come to the factory to refuel but
we would go to them instead. It may then seem as to how fuel can be delivered so often.
But a litre of hydrogen can run the car for approximately 390 kilometers. Hence it will be
more cost effective for us to deliver the fuel directly as per their convenience. We would
have mini fuel trucks like the size of the regular ambulances that will be particularly be
imported from India (as the cost is low) and will run on LPG and the emission from these
vehicles will be controlled as well by using the 3-way catalyst technology (Nett). Each
location will have an average of 5 to 10 fuelling trucks depending in the demand of the
vehicle in those particular cities. Now, if the owner of the car sees that his car is running
low on fuel, all he needs to do is to make a phone call. But then what if he already runs

Page 20
out? Every car is fitted with an emergency hydrogen tank which is attached to the main
tank. This emergency tank will contain a litre of hydrogen enough to run the car for
approximately 390 kilometers.

6.10 Product Planning

6.10.1 Marketing of our new innovation ‘Jaguar XH’ (Hydrogen)
Target Market: This product will be targeted towards the upper class segment in the US and
UK markets, the product will offer new hydrogen technology to its consumers. The major
attraction for this segment of consumers will be the new hydrogen technology and the
higher speed and efficiency offered by this technology.

New Product Development Policy: We recommend company will continue investing in

Research and Development for updating and improving our new product according to latest
developments and trends in consumer’s tastes. The special R&D budget for this product will
be calculated in the section ahead.

It was first environment friendly car to be sold on retail basis in the UK and US market in
the year 2013.

Pricing-policies and procedures relating to:

Price Level: Our product will be expensive and target the premium segment and its price
will range between GBP 1.5 million to GBP 1.8 million.

Margins to adopt: Considering the heavy investment in the project. We would start with a
heavy margin and slowly tighten the margin on the basis of market competition.

Price Policy: Our Company will follow One-Price policy in a country but price may vary
between U.S and U.K depending upon Government taxes and Import Export tariffs

Branding policies and procedures relating to Brand Policy: The car will be available in the
market under the brand name of Jaguar.

Channels of Distribution- policies and procedures relating to:

The car will be available to end users through already established showrooms of Jaguar in
U.S and U.K. also the existing channels of distribution will be proposed.

Advertising- policies and procedures relating to:

Product Image: Our product will be the first of its kind. It will be the world’s most
environmental friendly car and this will be its unique selling point. It will be marketed as the

Page 21
world’s first fastest sedan because of the advantages of hydrogen technology. A heavy
budgeted marketing plan will be needed, as this product will be the next biggest innovation
to hit the industry after the TATA Nano.

Corporate Image: Jaguar is famous for years for manufacturing quality luxury and sports
cars for upper and upper middle segment of the market. With the takeover by TATA, it will
be benefited by the reputation that TATA enjoys of an innovative company.

Mix of Advertising: Our car will be advertised through Ads on T.V, Internet. Big boards and
banners will be displayed in the main and commercial areas in cities of U.S and U.K.

Promotions- policies and procedures relating to:

Tag line – ‘The Greenest Leaping Cat’

It was marketed with an expensive marketing budget of GBP 100 million through all
possible promotional sources, as the world’s most environmental friendly car ever.

Display and Launch: Our car will be first displayed and launched in Auto Expo in U.S and U.K
in 2015 and all other major automobile expo’s held in all parts of the world.

It will be available for test-drives at Jaguar showrooms in U.S and U.K. It will also be put on
display for public at major airports in U.K and U.S.

Servicing: As this is an all new product and technology, servicing could be a biggest
challenge that JLR will face. All arrangements will be made for after-sale servicing of our
new car at all the service centre for Jaguar in U.S and U.K. Also auto parts will be made
available with the dealers for replacements in case of damage by accidents. (Harvard
Business School)

6.11 Product Mix

Jaguar is a premium luxury car brand, which is now a part of Tata Motors. Being a car
manufacturer for more than nine decades, Jaguar has constantly changed its models over
time. The first model was 2 ½ liter saloon, succeeded by 3 ½ liter saloon. Then the company
introduced Mark series of vehicles. The engines of these cars were manufactured by
Standard Motor Company. Along with regular driven models, Jaguar had a first
breakthrough with the launch of record breaking engine design in XK120 sports car in
October 1948. In 1992 Jaguar had the fastest production car in the world XJ220. XJ220
achieved the maximum speed of 217 mph (349 km/h). Over the years after 1992 Jaguar
models sported their famous chrome plated leaping Jaguar, which used to be the part of

Page 22
radiator cap earlier. Jaguar mainly focuses on research and development, which helps them
to develop world class innovation as part of their marketing mix product strategy. They aim
at making sleek, sturdy cars using aluminum technology which helps to build lighter and
more agile cars like the XE and the XF models. They are into the development of prospects
of technologies of predictive gesture and voice control activation, laser referencing which
will help to warn the drivers of any obstacles unseen by the driver and semi-autonomous
driving systems to eliminate driving errors and improve road safety.

Page 23
7. Global Pricing Strategies
Jaguar being the luxury car manufacturer does not aim the masses for its products.
Premium pricing strategy in its marketing mix is the backbone of the brand. The prices are
supreme for all its range of models. The model XF costs approximately 30000 GBP, while XK
costs around 60000 GBP. These prices increase as per customers’ requirements. In India the
start price is around Rs 49 lakhs, and goes upto Rs 2 crores. Compared to its competitors
BMW, Mercedes and Audi; Jaguar is expensive and they take pride in being able to provide
high performance, luxury and innovation in every vehicle they deliver. They provide best in
class warranty coverage which is unlike other competitors’ coverage. They have the 5 year/
60000 miles coverage whichever comes first, along with complimentary, roadside
assistance and telematics coverage. The resale value of Jaguar is decent but not as much as
compared to its German competitors.

Be rest assured, if you think of how much diesel or petrol will cost when you buy this car,
then this car is not for you. Jaguar purely uses a super premium pricing. The preserve of the
rich or famous, Jaguar cars can be very expensive. The starting price of the XF is about
30,000 GBP, while the XK can cost nearly 60,000 GBP. These prices can have thousands
added on, depending on the customer’s desires.

In India, the Jaguar XF is around 48,60,000 (INR), and can rise to as much as 1,88,00,000
(INR) for a convertible XK. Jaguar provides dealerships which can offer customers loans or
repayment schemes. The running costs and maintenance of a Jaguar may be more
expensive compared to other car brands. Nevertheless, it is worth the luxurious features
the car comes with. However, it does not fit everybody’s budget.

Page 24
8. Integrated Marketing Communication
8.1 Marketing Mix
Marketing Mix of Land Rover analyses the brand/company which covers 4Ps (Product,
Price, Place, Promotion) and explains the Land Rover marketing strategy. The article
elaborates the pricing, advertising & distribution strategies used by the company.

Let us start the Land Rover Marketing Mix:

8.1.1 Product
Land Rover is a luxury SUV brand which has a strong presence all across the world. Land
Rover has a long history of coming up with innovations from 1969 when a prototype range
rover velar was manufactured, in 1970 they came up with 3 door range rover which was
replaced by 4 door range rover in 1981. Land Rover came up with second generation and
third generation range rover in 1994 & 2001 respectively. It started with Range Stormer
concept in 2004 and came up with range rover sport production in 2005. It launched LRX
concept in 2008, Range Rover Evoque production. It came up with fourth generation in
2012 which was succeeded by Range rover hybrid in and second generation Range Rover
sport in 2013. 2015 was one of the year when many new innovative concepts were launch
as such Range Rover SVR sport launch, Range rover SV autobiography, Range Rover Evoque
convertible. In 2017 they have launched new Range Rover Velar which has main focus as
the family vehicle. Right from the starting Land Rover has focused on innovation and
technology and is known for its luxury, comfort and speed. Land Rover products only focus
on the customers of above economical classes. Land rover’s current diverse product
portfolio in its marketing mix which is giving a tough competition to others with its compact
design are Range Rover, Range Rover Sport, New range rover velar, Range Rover Evoque,
All new discovery, discovery, discovery sport. Land Rover to focus more on its positioning of
cars and how to make it more visible and have stayed with high quality premium products
rather than going for low cost models.

Page 25
8.1.2 Price
Land Rover SUV pricing varies according to demography, different markets, different
products and location. This helps in covering a larger number of customers who can access
their vehicle according to their comfort. On the basis of product there is a huge variation on
the products like usage of engines – when there is an original parts of engine then they use
penetration pricing but with the change in the engines or some other parts or coming up
with new innovations make them use a higher rate accordingly which is sometimes also
known as prestigious pricing. Still being the premium product Land Rover prices are a little
high and it has been preferred more by the customers who are in love with the brand and
quality more than the price of the product. Not only its base price but its usage and
maintenance cost which is way high also makes it as a premium product.

8.1.3 Place
Land Rover has got a global presence which can be seen from its strong place & distribution
strategy in its marketing mix. To prevent the post purchase problems for consumers like in
service and maintenance, Land Rover has built up a channel which consists of various
international networks and more than 2000 franchise sales dealers. As now Land Rover has
been purchased by Tata Motors which is an Indian company so Land Rover is focusing on its
further expansion in Asia. Like to penetrate in China it has done a partnership with a
localize company cherry automobiles which will help it in distribution of products. Land
Rover is also focusing to open up their exclusive Land Rovers showrooms in Asian sub-

Page 26
continent part especially in India in order so that their vehicles visibility increases and also
they will be able to pitch their products to more audience.

8.1.4 Promotion
Land Rover is one of the companies who don’t need a very big promotion but still Land
Rover lot of its effort to keep up with the brand name and make up an image of adventure
spirits in the mind of customers, for promotion apart from the traditional way of TV
advertisement, newspaper, magazines etc. Land Rover is famous for its different
campaigns. It has organized various live campaigns like off-road challenge showing the
supremacy of their model while driving off road, various fun drives etc. It also promotes its
brand different sponsorship according to the interest of nations and participating in various
rallies. To promote its theme spirit of adventure Land Rover has also opened a club – LROC.
Apart from this Land Rover is also promoting its brand by doing various CSR activities which
is very much an approach to make customers aware about their products and increase their
revenue. Also Land Rover has been doing pretty good in promotion on social media sites
while coming up with various innovative videos and online campaigns to increase
awareness about their new products and services. Hence, this completes the marketing mix
of Land Rover.

About Land Rover

Land Rover is classy SUV rolling on the streets since 1948 who was earlier owned by British
company Jaguar but few years before in 2008 was acquired by Tata Motors. Land Rover has
always displayed the will of innovation by building the first its first range rover which had
steering wheel in middle to a SUV with its compelling cleanliness and loaded with modern
technology including design cues. Land rover is known for its best designs, technology,
luxurious and comfort. Overall Land Rover has never broken the image of quality products
which comes up in the mind of users on the name of Land Rover. Land Rover design and
products are mostly influenced by the military vehicles, if we go through the timeline of
products launched by Land Rover we will be able to find out many Land Rover products
were close enough to military vehicles. Jaguar Land Rover covers around 10% market share
which they are expecting to grow this year. Major competitors of Land Rover are Audi,
Ford, and BMW etc.

Other Details:
Product Image: Our product will be the first of its kind. It will be the world’s most
environmental friendly car and this will be its unique selling point. It will be marketed as the
world’s first fastest sedan because of the advantages of hydrogen technology. A heavy

Page 27
budgeted marketing plan will be needed, as this product will be the next biggest innovation
to hit the industry after the TATA Nano.

Corporate image: Jaguar is famous for years for manufacturing quality luxury and sports
cars for upper and upper middle segment of the market. With the takeover by TATA, it will
be benefited by the reputation that TATA enjoys of an innovative company.

Mix of Advertising: Our car will be advertised through Ads on T.V, Internet. Big boards and
banners will be displayed in the main and commercial areas in cities of U.S and U.K.

Promotions- policies and procedures relating to:

Tag line – ‘The Greenest Leaping Cat’

It will be marketed with an expensive marketing budget of GBP 100 million through all
possible promotional sources, as the world’s most environmental friendly car ever.

Display and launch- Our car will be first displayed and launched in Auto Expo in U.S and U.K
in 2015 and all other major automobile expo’s held in all parts of the world.

It will be available for test-drives at Jaguar showrooms in U.S and U.K. It will also be put on
display for public at major airports in U.K and U.S.

Servicing- As this is an all new product and technology, servicing could be a biggest
challenge that JLR will face. All arrangements will be made for after-sale servicing of our
new car at all the service centre for Jaguar in U.S and U.K. Also auto parts will be made
available with the dealers for replacements in case of damage by accidents. (Harvard
Business School)

Page 28
9. Change in Marketing Strategies
9.1 TATA’s advertising in its early years

On Sept. 09, 1925, Jehangir Tata wrote a letter to his father Ratanji Dadabhoy Tata from the
barracks in the south of France. The 21-year-old had come up with a way to help the family
business. He wanted Pathé News, a famous newsreel maker of the time, to produce short
films about current events in India to be shown in the country’s cinemas.

The young Tata scion believed that footage of Mohandas Gandhi’s visit to their steel factory
in Jamshedpur in 1925 would be “excellent and free propaganda and advertising.” “Too
many people in India believe that steel works are just the same as a cotton mill, a foundry
or a power station,” he wrote. “That is why they are all so amazed when they see that
people who have seen this marvelous plant and the fine town we have built don’t wonder
afterwards or shout where the (Rupees) 21 crores have gone to!”

Gandhi had made the trip to Jamshedpur to resolve labour disputes and ask that the
Jamshedpur Labour Association be recognised by the company. Jehangir Tata had been
informed that Gandhi’s preconceptions were shaken after he visited the factory and
believed sharing the footage with the public would quell any similar distrust among them.
In 1969, the year of Gandhi’s birth centenary, his Jamshedpur visit finally made it to
promotional material. A Tata Steel advertisement from that time said, “…we proudly recall

Page 29
that, when (Gandhi) visited Jamshedpur in 1925 and 1934, he was happy to see the cordial
relations there and felt their further extension would help to achieve a ‘Miniature Swaraj’.”

Jehangir Tata, who would later be popularly known as JRD Tata, apologised to his father in
case he was “talking rubbish.” “It is the best way to talk sense one day, isn’t it?” he wrote.
The letter was but a small glimpse into events that would transpire in the future.

JRD Tata took charge as chairman of the Tata group in 1938. During his 53-year tenure at
the helm, it published numerous advertisements asserting its contribution to the country.
Long before its companies were asking consumers to “Jaago Re” (Wake up) or add a pinch
of “Desh ka Namak“ (Country’s salt) to their food, they were communicating—in a variety
of ways—their alignment with India’s mission to be a self-sufficient and expanding
economy with a high standard of living. Over 200 vintage ads of the conglomerate, from the
early 20th century up to 1990, along with the letter that JRD Tata wrote to his father, are
on display at the Tata Central Archives in Pune. And if there is one theme that runs right
through them, it is nation-building.

Page 30
Page 31
“The exhibition (Tata Vintage Advertising and Publicity) showcases not only the genesis and
history of the Tata group, but also highlights in parallel the integral role that the group has
played in India’s industrialisation and progress,” says the press release.

The foundation of the Tata group was laid by Jamsetji Tata in the 1870s with a textile mill.
The young Parsi had made a tidy profit of Rs40 lakh sending supplies to the British troops in
the Abyssinian war, and had held nationalist sympathies. After his death, Lord Curzon, the
viceroy of India between 1898 and 1905, said that “no Indian of the present generation had
done more for the commerce and industry of India.”

The Tatas continued to be regarded by many as patriots after Independence. But the Indian
leadership at the time also held strong socialist ideals, and both advertising and large
private enterprises were viewed with suspicion.

Early in 1968, JRD Tata, in a letter to World Bank adviser George Woods, wrote: “I am afraid
that in spite of all the lessons of the past twenty years, there’s no real change in Delhi’s
attitude toward “big business”, nor have our politicians and bureaucrats realised that what
seems big business to them would be little more than peanuts elsewhere.”

Companies in the private sector faced strict government controls and often felt that they
were at the mercy of politicians’ caprices. Author and researcher Claude Markovits
observes in his essay The Tata Paradox that the group lost the unique position it held
before Independence, when it enjoyed the protection and support of the colonial state and
benefited from patriotic enthusiasm simultaneously. “When British rule came to an end,
other big Indian firms had a more intimate connection to the Indian state as a result of the
support they had given the Congress during the independence struggle,” wrote Markovits.
“This was particularly true of the Birlas and some of the Ahmedabad textile magnates.”

Against this backdrop, it’s clear from the advertisements that the company wanted to be
seen as a force for good—one that wasn’t focused on accumulating wealth and power for
its owners and shareholders, but devoted to improving the country.

Page 32
Page 33
Veteran adman Roger Pereira, whose early assignments involved working on Tata
advertisements at J Walter Thompson in the 1960s, mentions a time when advertising
helped the company navigate political hurdles. In 1977, George Fernandes, the industry
minister at the time, wanted to nationalise Tata Steel. In response, the company ran a
campaign that detailed its philanthropic work and added, almost in passing—”we also make
steel.”

“They said, ‘we’ve built these hospitals, we’ve done this and this…and we also make steel.
This is how we spend our money’,” said Pereira. “(The Tatas) weren’t profiteering for the
sake of profiteering; they were investing in the country. That was a brilliant campaign, the
most brilliant advertising campaign of all time in India. That’s what made Fernandes really
look like a fool.”

This brand positioning is also seen in a Tata Iron and Steel Company advertisement from
October 1955 that was created by J Walter Thompson. It portrays a man in a loincloth
holding a long sheet, and says that India has come from importing the bulk of her textile
requirements 30 years ago to having the second-largest textile industry in the world.
Written in a larger font size below this, it reads, “Private Enterprise Serves the Nation.”

An advertisement announcing the opening of the Trombay Power Thermal Station in 1956
said it was “yet another Tata contribution to a higher standard of living through an
expanding economy” and an “example of the work of enlightened Free Enterprise.”

Earlier in 1949, Tata made the connection between steel and agriculture in an
advertisement that talked of the mechanisation of agriculture. It had a photograph of
Nehru watching a tractor in operation. That same year, the company ran an ad that said,
“Steel links India’s Frontiers,” and described how 7,000 tonnes of steel were used in the
newly-laid railway line connecting Assam to the rest of the Indian Union.

Indian companies at the time strove to distinguish themselves from multinationals by

emphasising their swadeshi credentials, and Tata was no exception with its Hamam soap—
“Tata’s Hamam is a bigger soap—it’s truly swadeshi, too,” read one advertisement. Another
reminded consumers that Jamsetji Tata had set up the Swadeshi Mills Co. in 1886, twenty
years before theswadeshi movement gained prominence.

Page 34
Page 35
Page 36
“Winning the government’s approval was important during the Licence Raj days—this
meant appearing to serve the people,” said Arvind Rajagopal, professor of media studies at
New York University. “Large companies also began to reflect aspects of national
developmentalist ideology. Advertising agencies all publicly avowed support for the
planned economy, for example, and the biggest ones were all foreign.”

“Nation-focused ads were released not only by Tata but by all companies,” said Arun
Chaudhuri, head of the marketing research company BRAND and the author of Indian
Advertising: Laughter and Tears. “Obviously, all these ads helped to support the
government line that India was on a rapid path of progress. The reality was that the
majority of the people lived pitiable lives hardly managing a square meal a day.”

According to Chaudhuri, another reason why advertisements tended to focus on the

country and its progress before liberalisation may have simply been a lack of creative
output from agencies. Since demand for goods was greater than supply in most industries,
companies didn’t need bigger markets and didn’t care all that much about the content in
ads. They were bought to keep newspapers—an important tool for public relations—happy.

Also in short supply were Tata Mercedes Benz trucks, which were “speeding prosperity to
the countryside,” according to an advertisement from August 1960. The truck was
compared with the Gwalior Fort that played a role during the Indian Mutiny (“Stalwarts
Both”) and the India Gate (“Gateways to Prosperity”).

The messaging was clear: Tata wasn’t just driving India to a brighter future; it was also
taking her back to her illustrious past. An ad for Tata Exports Limited, talks about “reviving
the age-old glory of Indian exports.” Other Tata Iron and Steel Company advertisements
refer to “implements of steel used by master craftsmen of ancient India”, “exquisite swords
of Indian steel” used in the past and admired by outsiders and Indian ships being “once
again on the high seas.”

If this rhetoric sounds familiar today, it is because it is used by politicians to invoke a sense
of nationalist pride. But for the Tatas, that was not the only motivation. Even
today, according to a recent survey, Tata Motors, a company that was founded 73 years
ago, is viewed by Indians as the second-most patriotic brand in the country.

Page 37
Page 38
9.2 Advertisement of JLR

Page 39
Page 40
Page 41
Page 42
Page 43
Page 44
(Land Rover advertising, marketing campaigns and videos)

Page 45
10. International channels of Distribution & Logistics
Logistics providers have played a key role in the global growth of Jaguar Land Rover, and
the OEM (Original Equipment Manufacturer) wants to extend co-operation even further.

The growth of Jaguar Land Rover (JLR), the UK-based, Tata-owned, premium carmaker,
makes for common reading nowadays in the British press. Land Rover plants in Halewood,
near Liverpool, and Solihull, near Birmingham in the Midlands, are being expanded and
have moved to three-shift production. The Jaguar factory in Castle Bromwich, also in the
Midlands, is slated for upgrades and new models.

A walk around the Solihull plant reveals a veritable building site, as it is in the middle of a
two-year expansion project that will extend the production line, add offices and warehouse
space. The unassuming brick building that currently houses assembly for the Range Rover
Sport and Defender—the dark red of the ground floor exterior still the original,
camouflaged colour from 1937, when it was built as a ‘shadow factory’ to produce Spitfire
engines—will be redeveloped later this year as the line moves across the road to a new
assembly hall.

It’s a dramatic change considering that JLR and Tata were planning to close either Solihull
or Castle Bromwich less than three years ago. Profits from JLR reached a record £1.5 billion
($2.35 billion) in the last financial year, but Tata is not lining its pockets—along with
expanding the current plants, a £355m engine factory is planned for Wolverhampton, while
this May the company took over a former Vauxhall warehouse at Ellesmere Port to support
production of the Range Rover Evoque and the Freelander 2 at Halewood.

As impressive a ‘local’ story as JLR’s rise is, even more important has been the global nature
of its success, ambitions and supply chain. JLR exports to 177 markets, with sales brisk in
China, Russia, North America and Germany. Although its plants are in the UK, JLR’s Indian
ownership gives it a foothold in a market with considerable potential—last year, for
example, JLR opened a knockdown kit assembly plant for the Freelander in Pune (its fifth
globally after Turkey, Kenya, Malaysia and Pakistan), and is exploring adding more models.
It has also announced a joint venture with China’s Chery and its intention, pending
government approval, to build a new factory in China.

Contracts of Trust
Growth on this scale naturally creates supply chain complexity and logistics demand. But it
is more than numbers driving JLR’s logistics team. David Dyke, global logistics director
(pictured above), has helped change how the company works with providers, including

Page 46
more technical methodology—with a system of monitored performance and computer-
generated models—and a shared, ‘open book’ approach with partners.

Dyke says that business with suppliers is now based on ‘contracts of trust’. Insofar as an
outside observer can tell from reviewing the OEM’s logistics, this is not mere management
patter. JLR has a logistics outsourcing strategy that stands out for the responsibility it
devolves to lead logistics providers (LLPs). JLR has pulled together virtually its entire
inbound network and integrated it under the control of DHL, which manages transport,
stock handling and line feeding at the three plants. Similar control has been arranged with
speciality provider Priority Freight for premium freight movements, and for outbound
logistics with Ford in the UK; Volvo Logistics in Europe; and other providers, such as WWL,
for some markets.

The LLPs work in tandem with JLR, as DHL’s management works with inbound logistics
manager Al Jeory’s team to make joint purchasing and strategy decisions. The same applies
for Volvo Logistics and others who work with Gareth Williams, outbound logistics manager,
and his team.

For Dyke, these relationships save on cost and increase flexibility, but they must be built on
openness. “We must share confidential data sometimes with providers such as forward
volumes so that they can plan on our behalf,” says Dyke. “There is no benefit to keeping
providers away from the table.”

Dyke suggests that the next step will be to form even longer partnerships. “We see that if
you drive 12-month contracts, you get 12-month solutions. In future we’re trying to form
key relationships for a longer period aligned with our business plans, which can typically be
five years in advance,” he says.

Given its growth, there has been no better time for providers to align themselves with JLR’s
business plans. “If a provider delivers excellence and overachieves, I see another
opportunity, such as an offsite sequencing centre, or a plant in another country, then the
provider could become part of that development,” says Dyke.

As a recent example, JLR has outsourced the management of the Ellesmere Port warehouse
to DHL. Upcoming projects, including the Wolverhampton engine plant and especially the
China factory, could open up a trove of opportunity, although JLR says it is too soon to
discuss these projects in detail.

Page 47
“We want to work with the supply base on things like partnership and collaboration
because that is what we see driving efficiencies,” says William “At JLR, our size also means
we can be more flexible and approachable in many ways, including for things like contract
duration for the right, innovative partners.”

The supply chain and its history

A closer look at JLR’s supply chain reveals that it is informed partly by its ownership history,
which has included the Rover Group, British Leyland, British Aerospace, BMW and Ford
before Tata. BMW heritage can partly be seen from the huge range of options available on
a build-to-order basis, while Ford has left not only engineering fingerprints but supply
agreements, including powertrain deliveries from its UK plants for diesel engines from
Dagenham and petrol from Bridgend, and even Mexico for some models (although the new
engine factory will change this mix). It is also an LLP for the company for outbound logistics.

JLR’s supply chain is highly regionalised, with 350 suppliers in the UK and 450 suppliers
across Europe, according to Al Jeory. There are about 50 global suppliers, split between
North America, Japan and China. There has been no notable shift in sourcing towards India
or South-East Asia under Tata, with only a few suppliers in India, and one each in North
Africa and South Africa. “Low-cost country sourcing has not been a driver for us,” says
Jeory.

Despite its ownerships, JLR’s logistics management has always kept a measure of
independence, which is perhaps truer today under Tata given that it has no other
automotive presence in Europe. The development of the LLP contracts and JLR’s supply
chain engineering demonstrate this entrepreneurial approach. Tata even recognised JLR’s
logistics management globally last year with one of its Inovista awards for reducing carbon
emissions in the supply chain.

“Tata has been a phenomenal opportunity, and very supportive,” says Dyke. “If we have an
idea that makes business sense, we’re able to action it and get on with it very quickly.”

A complete LLP strategy

JLR isn’t the first to adopt an LLP-style approach; interestingly its former owners also have
contracts with DHL, as BMW uses the provider for its less-than-truckload (LTL) network and
Ford for inbound management. But JLR has gone further, with DHL responsible for around
85% of global inbound freight, including all of Europe and the UK, with a common service
for the three plants through LTL and full-truckload (FTL) shipments that hinge across three
principal crossdocks in Europe. JLR shares its schedules with DHL, which then does its own

Page 48
route planning and carrier management. DHL is also responsible for stock management and
line feeding at the plants. DHL is also responsible for stock management and line feeding at
the plants.

DHL has direct access to the loading decks at factories, where it delivers the parts and
manages stock with its own staff at the ‘marketplaces’. When line-side stocks are low,
workers press a button that prompts a DHL worker to replenish supplies.

“It is a total, accountable supply chain from start to finish where we understand total cost
and we can drive and share best practices across our plants and get the synergies because
of the size of the operation,” says Dyke.

Thanks to computerised modelling and high levels of visibility, Jeory says the network is
highly efficient, with FTL utilisation rates around 91% and LTL at 88%. “We have very good
computerised monitoring tools that are giving us an edge in terms of improving those
figures, including GPS tracking and in-cab technologies,” he says. “We monitor them daily
and monthly with DHL.”

Furthermore, the LTL model across Europe has opened doors to inbound collaboration with
other carmakers, reveals Jeory. “About three or four years ago, we began actively engaging
in sharing routes with other manufacturers,” he says. “We are currently working with two
other OEMs and sharing DHL facilities in the UK and Europe.”

Jeory and Dyke each stress that both companies have made adjustments to work from a
mainly “open book” cost model, where purchasing decisions about transport and resources
can be made together. As well as understanding the cost basis of what DHL manages for
JLR, Dyke says it is important for the carmaker to appreciate that the LLP needs to make a
profit. “Both of our companies need to be successful and once you work to find the right
balance, you can focus your energy on finding efficiencies,” says Dyke.

Such a close alignment can be as risky as it is bold. During lengthy and protracted pay
negotiations earlier this year between DHL and Unite, the union that represents DHL
drivers and workers in the UK, industrial action threatened supply at JLR.

While JLR will not comment on the situation, citing it as an internal DHL matter, Dyke
stresses that it does not represent a hitch in the JLR-DHL relationship. Indeed, Dyke says
that JLR’s increased inbound flexibility has been essential to its ability to nearly treble
volume over the past three years. As an example, Dyke says that in the past, JLR used to be

Page 49
locked into a three-month planning cycle for freight deliveries. “Now, I can replan my whole
freight plan every two weeks,” says Dyke.

Likewise, JLR has needed to be fast when it comes to ramping up production and supply
chain capacity. For the Ellesmere Port warehouse, Dyke reveals that the company has only
eight weeks to start active operations. “It’s quite an exciting journey,” says Dyke.

Reducing premium freight spending by 80%

Another area in which the company has extended the LLP concept has been for premium
freight shipments with Priority Freight. “Similar to DHL, we deliberately set about the
process of setting up Priority Freight as a bespoke team to us, so that they would
understand our needs,” says Jeory.

Rather than a generic freight company used to contract expedited shipments, Priority
Freight monitors and addresses situations before they arise, according to Jeory.

But while Priority Freight operates as an LLP, an element of competition remains as JLR will
also use DHL for some shipments. “Before we book a shipment, we do a cost comparison
between the two,” Jeory says.

With more controls in place across the entire supply chain, the results have been
impressive, with JLR’s budget for premium freight declining even as volume soars. “We’ve
made massive inroads with premium freight, and I think we’ve probably reduced the
annual budget by about 80% during the past seven years,” says Dyke. “That is all about
having confidence in your data integrity and stock control, and having people who manage
your parts correctly.”

Global systems for order to delivery

JLR’s logistics innovations are not limited to inbound material movements. Outbound
logistics has been characterised by a focus on several areas, including gaining better control
and visibility over the order-to-delivery (OTD) cycle, as well as decreasing lead times for
exports, in particular for fast growing markets like Russia and China. The company is also
testing further advances, such as a two-speed distribution model that could prioritise
certain vehicles.

JLR sells on a build-to-order basis for most markets, including for the UK, Europe and China.
However, even for exceptions such as the US, where dealers usually order in stock,
providing reliable delivery dates is a prime objective, according to Gareth Williams. He adds

Page 50
that this reliability has been important not only for customer satisfaction but for managing
inventory and cash flow in terms of wholesale and retail deliveries.

To improve the OTD cycle, JLR has installed new global ordering, pipeline and distribution
systems. According to Williams, the OTD systems have come together during the last year
to provide an enhanced dashboard view across the entire cycle. “The three systems enable
dealers at the point of order to come through to our pipeline system to check on
constraints, build slots and availability within allocations, and ultimately, based on the lead
time to market and distribution offsets, to give a date when customers can expect to get
the car,” says Williams.

Following from the initial date, the system links to JLR’s logistics monitoring and is updated
with the vehicle’s progress, including anything that would anticipate an early or late arrival.
“We can now do this monitoring and communication for 98-99% of our dealers around the
world,” he says.

JLR has also spent considerable time developing a vehicle tracking system aligned to these
three systems, providing updates at every segment of the distribution process and allowing
statistical analysis of outbound metrics. “It’s about process control rather than waiting for
someone to ring up and complain about delays,” says Williams.

The OTD systems have been integrated across marketing, manufacturing and distribution.
According to Dyke, the metrics to improve the reliability of the ‘ABS on time’—which is
when the vehicle is slated for release from the plant for distribution—are thus driven across
the entire organisation. “We work across all the manufacturing teams. The plants, for
example, have clear metrics in terms of building the car on the right day, the level of work
in progress and its age,” says Dyke. “We’ve managed to get those responsibilities
disseminated right through the management down to the track team leaders, and it’s on
everyone’s corporate scorecard.”

Williams reveals that JLR is also exploring a two-tier distribution model. Currently, the
company treats sold and stock vehicles the same. But with more focus on providing
customers with reliable delivery times, JLR has created the ability in its OTD system to
expedite sold cars. While not yet implemented, the system is being piloted in some
deliveries.

“We’ve developed two routes to markets in the system, almost like a first and second class
post,” says Williams. “It can be completely different transport modes and providers.”

Page 51
A collaborative outbound strategy
JLR runs a mixed model between centralised distribution, LLPs, national sales companies
(NSC) and importers. Williams and the JLR purchasing team generally have central control
over carriers and contracts in the UK and Europe, for example. In larger overseas markets,
like the US, there are NSCs, but these organisations work with the UK in a “networked
alignment”, according to Williams. A large amount of the purchasing and logistics decisions
are carried out jointly according to strategies developed centrally in the UK.

Further afield, specialised importers control certain markets and take responsibility for the
vehicles at ports of entry. However, as a market develops JLR will often develop an NSC and
align it more closely with the central organisation—this was the case in China in 2010 as
well as in Russia.

JLR’s management is supplemented by LLP contracts for different regions. In the UK, for
example, JLR uses Ford, an arrangement agreed when the company was sold to Tata, which
has worked well for several years. As a volume seller, Ford has a certain economy of scale in
the UK, including an in-house fleet of car hauliers and its own jetty and terminal in
Dagenham (see Finished Vehicle Logistics p16). While JLR exports many cars from the UK,
Ford imports a lot of them, allowing backhauls between ports. “Our relationship with Ford
is an excellent example of an effective working partnership where we’ve built trust with
another OEM,” says Dyke.

For continental Europe, JLR uses Volvo Logistics, the 3PL arm of the Volvo Group, as an LLP
for contracting short-sea carriers and land transport. Williams says that volumes are often
combined with those of Volvo Cars, as well as other manufacturers. “We don’t mind co-
loading with other OEMs if it improves efficiency,” says Williams.

JLR uses LLPs in other export destinations as well, depending on the business case and if the
provider might have better capabilities to exploit the market. “When we tender lanes, we
offer the possibility to quote on one leg of the journey, or on the complete route, or to
operate the whole region with an overseeing route manager or LLP,” says Williams.

An example is the use of WWL to distribute cars in China. WWL takes control of the vehicles
from the port of Southampton, arranges shipping with Eukor (a sister company), handles
import documents, terminal management and final delivery. Williams says that it works
well, in part because it has given JLR a simplification of IT systems and visibility, as well as
eliminating certain damage ownership issues.

Page 52
But he admits that the LLP approach is not right for every market. “We did the same
quotation process with Russia, but ultimately we decided to keep it separate and to
manage it ourselves,” Williams says. “We’ve also looked at [this] for other markets, such as
Australia, but have kept a direct sourcing model. But every time we re-tender, we look
again at whether or not an LLP would be applicable.”

While working with LLPs is a way for JLR to get competitive capacity despite its relatively
small size, Williams believes that good carrier relationships have made it attractive to
logistics providers. “Providers want our brand on their portfolio. Because we’re small in
relation to other big volume OEMs, we can be more approachable in some ways,” says
Williams. “We know that our rates are competitive but they are also not the cheapest, as
we recognise the importance of a quality service that we need to meet our premium
expectations and growth.”

Network planning
JLR uses up to 12 ports of exit from the UK, with European exports moving on a daily basis.
The predominant ports are in the Humberside area of the north-east, Portbury in the west
and the Thames Estuary in the south-east. Most deep sea exports leave from Southampton
on the south coast. JLR uses mainly road to the ports, but also uses some rail services.

While it uses a considerable amount of short-sea shipping, JLR currently has no regular rail
services from the UK to Europe. In the past it used the channel tunnel to rail cars to Italy,
but Williams says that cost has become prohibitive.

With the increase in volume for exports, JLR has seen some capacity issues. Williams points
to congestion at UK ports, while he is also worried about a lack of investment in the car
transporter fleet across Europe. “With the lack of money in the distribution world, there
are some capacity issues and the quality of the current transporter fleet is degrading,” he
says.

JLR wants to work more closely with carriers and port authorities to address the situation,
including sharing longterm forecasts. “We are in dialogue with the ports and carriers to
share our volume forecasts over the next five or six years, to make sure that they are
looking to invest,” Williams says.

Just as JLR reengineers its inbound network, outbound flows are also subject to changes,
including shifting ports and routes to markets. JLR recently made more fundamental
overhauls for two of its most important markets, China and Russia.

Page 53
JLR previously relied on four importers for distribution in China, and sent its vehicles by
container to four different ports. In 2010, it switched to an NSC, changing also to ro-ro
shipping and consolidating at the ports of Shanghai and Tianjin (close to Beijing), using
WWL as the LLP. Midway through 2011, with volumes at record levels, JLR added the port
of Guangzhou, in the south.

“By adding the third port, we’ve significantly reduced lead time and emissions by reducing
land transport,” says Williams.

In Russia, JLR used to import vehicles via Finland by truck to St Petersburg and Moscow.
Last year, together with the newly-formed NSC, JLR held a joint tender to import directly
through the port of St Petersburg, with inland distribution handled by five Russian carriers.
“The change has taken about five or six days out of our total supply chain, as well as 500
tonnes of CO2,” Williams says. “It’s a good example of how we can work with our NSCs to
align our distribution strategies.”

The recruitment challenge

Returning again to headlines, there has been much celebration around JLR’s job creation in
a UK economy that has entered a double-dip recession. But the structure of JLR’s logistics,
including outsourced warehouse and line feeding, means that nearly 1,000 of those jobs
have been in logistics both within the company and mostly at providers. What have been
most exciting —and challenging—for Dyke has been the need to recruit talented logistics
managers?

“From a logistics perspective, we have phenomenal global opportunities,” says Dyke.

“We’re keen to get people interested in logistics here. We believe logistics is often the
lifeblood of our organization.”

A search on the JLR website brings up logistics-related job offers, and Dyke makes a direct
call to both applicants and potential suppliers to the company to get in touch with him. He
stresses, however, that the old image of logistics management as a reactive or stagnant
function is long dead at JLR. “You have to have a high degree of business acumen, and be
prepared to work in a very dynamic and fast changing organization,” he says. “It’s
exhausting, but very rewarding.”

Page 54
11. Role of WTO in acquisition
Britain's traditionally feisty and combative trade unions, to a man, have been cheering
Tata's one-billion pound purchase of Jaguar-Land Rover in a remarkable coup for the Indian
conglomerate as it snapped up iconic British brands in its push towards a global footprint.

Just hours after Tata issued a low-key announcement to confirm it had "entered into a
definitive agreement with the Ford Motor Company for the purchase of Jaguar Land Rover,
comprising brands, plants and intellectual property rights," the top bosses of Unite, the
UK's largest trades union, said the deal "is really good news for the UK automotive
industry".

Roger Maddison, national officer for the automotive industry on Unite, which has over two
million private and public sector members, told TOI that Tata's acquisition was good news
because "Tata are into making cars, not just making money".

Dave Osborne, national officer for Unite's Amicus arm, which represents the manufacturing
sector, added that British workers were confident "Tata recognise the Britishness of the
two brands and have no intention of closing any plants in the UK. In fact, they are
committed that after 2011, all JLR products will still be designed and manufactured in the
UK".

Osborne added: "We are only sad because Jaguar has been part of the Ford family since
1989 and between now and 2010, Land Rover's projected profits would have been more
than they got from selling the business, so it is sad that Ford has chosen this moment to
offload JLR."

Unite, whose membership comprises 16,000 of JLR's 16,500 workers said it had
"unequivocally supported Tata" all along in the battle between three preferred bidders
because it felt Tata could be trusted and the others, JP Morgan-backed private equity group
OneEquity "was just in it to make money" and the third, Mahindra , "was capable but a bit
small".

The unions say they expect to hold Tata to its promises, including retaining jobs and
existing employee contracts for at least the next five years as well as putting money into J-
LR to "grow the business" as well as allowing other Unite members in Ford to "continue to
supply Jaguar Land Rover for differing periods with power trains, stampings and other
vehicle components, in addition to a variety of technologies, such as environmental and
platform technologies". British trades unions say Unite's three-cheers for Tata is based

Page 55
purely on the Indian company's "excellent" record in terms of management, worker
relations and "keeping its promises", 14 months after it purchased Anglo-Dutch steelmaker
Corus.

Maddison and Osborne insisted Tata had a done deal with respect to the JLR purchase '' as
early as November 20, 2007, in the event Ford would sell Jaguar and Land Rover because
we contacted our colleagues in Corus and in Tetleys, the other British companies acquired
by Tata''.

Trades unions' investigations revealed "Tata had not off shored or outsourced any jobs,"
stressed Osborne. Maddison added: "Tata's record with Corus was impressive". He stressed
that "Unite has secured guarantees for five UK plants on staffing levels, employee terms,
including pensions, and sourcing. The sale ensures our members futures and we look
forward to working with Tata.”

Page 56
12. Recommendations
 The Jaguar subsidiary needs drastic reform quickly to cure the fall in demand for its
smaller sedans the XE and XF.
 On February 8, JLR said that stripping out one-off items, it made a loss of 273 million
pounds ($310 million) in the latest quarter ended December 31. It said it was taking a 3.1
billion pound ($3.5 billion) accounting charge related to what it called muted demand in
the car industry. JLR announced last November it would implement a plan, called “Charge
and Accelerate”, to slash 2.5 billion pounds ($3.2 billion) in costs over the next 18 months.
Analysts wondered then if this might not be enough to turn JLR around. It faces harsh
competition from German manufacturers like BMW, Mercedes and Audi which all have
much greater scale to forge efficiencies. Therefore, JLR needs to offers some promotional
benefits to its customers in order to regain the trust & stop the downfall.
 Land Rover’s operation for undermining its own success by persisting with an overlapping
product range which confuses buyers and cannibalizes profits should be taken into
account in order to regain the top position in the market.
 JLR need a manufacturing plant in China in order to face the downfall that is being seen
due to Chinese economy. A manufacturing plant in china will decrease the cost for
Chinese market and customer will be more likely to buy the product.

Page 57
THANK
YOU!

Page 58