How Ratan turned TaMo into an automotive powerhouse

One of the important milestones in Tata Motors' history includes the acquisition of two luxury car brands, Jaguar and Land Rover, in 2008, from Ford Motor Co for over $2 billion after the latter was on the verge of bankruptcy due to the 2008 recession.

Bengaluru: One of Ratan Tata’s most enduring legacies would be Tata Motors, which under his stewardship became the second-largest Indian automotive company by market capitalisation (Rs 3.42 lakh crore) and third-largest by sales (13.57%).

Previously known as Tata Engineering and Locomotive Company (TELCO), Tata Motors embarked on its journey in 1945 by manufacturing locomotives and other engineering products. In 1954, it partnered with the German company Daimler-Benz, and until 1991, it was making only commercial vehicles.

Tata Motors ventured into the passenger vehicle segment in 1991, the same year in which Ratan started helming Tata Sons. The company launched iconic SUVs like the Sierra,  Sumo and Safari in the following years. Then came two of Ratan’s dream projects.

The first one was Indica, the company’s first hatchback and the first budget car completely designed and built in India, with an investment of Rs 1,700 crore. The vehicle had issues including high noise and vibration levels, and did not sell well initially, but after issues were fixed, it became a success. In 2007, Tata Motors launched its one-millionth Indica car at its plant in Pune.

The other was the Nano. Ratan’s dream was to provide a car for people who would ordinarily be able to afford two-wheelers. It was an ambitious project, with the company reportedly making an investment of Rs 1,500 crore. However, in its entire production life of a decade, it only sold around 300,000 units, especially as there were reports of the cars catching fire.

One of the important milestones in Tata Motors' history includes the acquisition of two luxury car brands, Jaguar and Land Rover, in 2008, from Ford Motor Co for over $2 billion after the latter was on the verge of bankruptcy due to the recession of 2008.

Interestingly, Ford was earlier approached by Tata Motors to sell its car division due to the failure of their debut hatchback, the Tata Indica. However, when belittled and humiliated over its foray into car-making by Ford, Ratan Tata withdrew the offer.

Ford chairman Bill Ford reportedly told Ratan Tata, "You are doing us a big favor by buying JLR." Tata Motors continues to earn a significant portion of its revenues from JLR.