Ford India to launch small car in India

Ford India Friday said it will launch a small car in 2011 in order to tap the growing market for compact cars in the country.

"The launch will be a game changer. It will take us into the centre of Indian market," said Ford Motor executive vice president for Asia Pacific John Parker.

The car will be priced between Rs.3-4 lakh. "It will be in the range that 70 percent Indian consumers buy," Parker told reporters on the sideline of the annual convention of the Society of Indian Automobile Manufacturers (SIAM).

Ford has invested about $500 million in India since 2008.

The company will also launch a refurbished version of its sports utility vehicle - Endeavour - next month.

"We will launch a significantly improved Ford Endeavour in a week's time. Consumers were looking for higher technology in the product and they will get the same," said Ford india president and managing director Micahel Boneham.

Ford India launches Fiesta ZXi

Ford, one of the largest car manufacturing company, has launched Fiesta ZXi, with a host of new features to enhance the comfort level higher, here today.

The new features on the Fiesta ZXi include an Anti-lock Braking System (ABS) with Electronic Brake Force Distribution (EBD), a 2 DIN MP3 player with speakers and front fog lamps. And all these exciting features are offered at no additional cost.

While briefing media persons here today, Nigel Wark, executive director, Marketing, Sales and Service, Ford India, said '' It has always been our endeavour to provide our customers exceptional value and these enhancements are in line with our overall product strategy to provide best in class offerings.'' Ford Fiesta gives Indian consumers the choice between Ford India's advanced and efficient Duratec (petrol) and Duratorq (common-rail, turbodiesel) engines, he said.

Ford decision to cut jobs angers British workers

Car giant Ford said Thursday it would cut up to 850 jobs at British plants by May and review this year's pay deal because of the "serious economic situation."

The announcement brought an angry response from trade unions who said industrial action would be an "option" if the plans went ahead.

The US company, which employs 12,900 people in Britain, said that "unprecedented circumstances" were behind the decision to review this year's agreed pay rise of a 5.2 percent.

But the Unite trade union described the plans as "completely unacceptable" and urged Ford to reconsider the decision.

"Ford has today reached a new low in corporate integrity. While their executives pay themselves handsomely and their European profits alone totalled $1.06 billion in 2007/2008, they are using the challenging global circumstances to cut the jobs and pay of the workers who helped make them these massive profits," it said.

Jaguar, Land Rover deal not without challenges: experts

With the acquisition of Jaguar and Land Rover, does the Tata group have the two big cats of the British automobile industry by the tail? Analysts are posing this question given the implications of the future emission norms in Europe. But Tata Motors are confident of addressing the challenge.
According to analysts and automobile engineers, Tatas Motors may get choked with fines on Jaguar and Land Rover - the brands acquired for $2.3 billion from Ford Motors Wednesday - when the proposed emission norms come into force by 2012.
"The maximum permissible emission limit will be 130 grams per km per model. The manufacturers may be fined if their models emit more," said Krishnasami Rajagopalan, senior analyst with Frost and Sullivan and a qualified automobile engineer.

Vehicle makers have an escape route if they average out their emissions over the entire fleet and set off the excess in some against lower emissions in others, he said.
"But for Tata Motors, having just two models in Britain could pose challenges," Rajagopalan, who heads the consultancy's Automotive and Transportation Unit, told IANS.
Nevertheless, C. Ramakrishnan, president and chief financial officer for Tata Motors, was confident of addressing the challenges. "The two models will meet the emission norms. Necessary agreements have been signed with Ford for sourcing engine technology."
The engine supply agreement signed with Ford Motor is mutually satisfactory and will be for a period of 5-9 years depending on the model. "There are some normal technologies that come along with an acquisition. Some other technologies do come under licensing agreement," said Ramakrishnan.
Car manufacturers, including premium and sports car makers, generally work on alternative powertrains such as hydrogen, fuel cells, electric vehicles and hybrid vehicles, then plug-in hybrids.
"Though Ford is already developing alternative powertrains, will it be ready to share its technology with Jaguar and Land Rover owing to its engine supply pact with the Tatas?" queried Rajagopalan.
"This could eventually result in the technology being accessed by Tatas and indirectly by Fiat through Tata," he said, while adding that car makers may be allowed to trade on emission certificates as in the case of carbon trading.
The other challenge for Tata Motors is the flexibility available to cut costs at the production sites in Britain, the process of integration and the challenges posed by the market, said Piyush Parag.
Tatas have decided to retain manufacturing of Jaguar and Land Rover in their home country, it will have also have to contend with higher cost of production and rising material prices in Western Europe, said Rajagopalan.
"The biggest challenge for Tata Motors is to balance the increase in costs with tradition, quality and performance of Jaguar and Land Rover. It remains to be seen if this will push Tata to look at low cost manufacturing in the near future."

This apart, since Tatas Motors will have separate supplier base for their India operations and that in Britain, the benefit synergies of scale may not be available - at least for the first five years.

But Ramakrishnan said the group could look at the possibility of sourcing some components from India. "Both the companies have competent high quality vendors. Nevertheless we will explore the possibilities to synergise all our operations."

Indo-Asian News Service

Tata pleases, Ford 'disappoints' British workers' union

The head of Britain's largest workers union Wednesday reiterated his support for Tata's acquisition of the luxury car brands Jaguar and Land Rover, but said he was disappointed by seller Ford's failure to retain a stake.
"If Jaguar and Land Rover had to be sold, then Tata was the best option," said Tony Woodley, joint general secretary of Unite, as Ford announced the sale of the two British iconic cars to Tata Motors Ltd.
The deal, announced Wednesday, already has the union's seal of approval, after it secured Tata's assurance that it will not shed jobs at the three Jaguar and Land Rover factories at Solihull, Castle Bromwich and Halewood and would continue to source Ford-made engine and components from its factories in Bridgend and Dagenham.
"We would have much preferred Ford to keep the companies in the family, so to speak, especially with Land Rover being so profitable," Woodley said.
"But with the commitments Tata have given to the future of Jaguar-Land Rover and the long-term supply agreements for components, especially engines from Bridgend and Dagenham, we're obviously pleased they are in the game."
However, Woodley added that there was disappointment that Ford had decided against taking a stake in the new future.
"That is a big disappointment," he said.
According to sources in Unite, union officials would have liked to see Ford take a minority stake, as it did while selling off the luxury car Aston Martin to two Kuwaiti investment companies last year. Ford retained a $77 million stake in Aston Martin.
This, the union officials feel, would have helped to "lock in" long-term commitments made as part of the agreement signed Wednesday between Tata and Ford.
The nervousness may be explained by the fact up to 40,000 jobs were at stake at a time of a global economic slowdown.
"On the positive side, Tata has not only given us a long-term commitment, but they are an industrial company as well," Unite's Andrew Dodgson told IANS.
"Tata recognise the iconic brand value of Jaguar-Land Rover - that they are British-engineered and British-made cars and so it is important to keep them in Britain," he added.
Ford acquired Jaguar for $2.5 bn in 1989 and Land Rover for $2.75 bn in 2000 but put them on the market last year after posting losses of $12.6 bn in 2006 - the heaviest in its 103-year history.
Tata was named by Ford as the preferred bidders in January as it beat off competition from fellow-Indian carmaker Mahindra and Mahindra and American buy-up specialist One Equity.
While the three Jaguar and Land Rover factories in Britain employ some 16,000 people, the number swells to between 30,000 and 40,000 when ancillaries are taken into account, according to Dodgson.
Indo-Asian News Service

Praise for Tatas for Jaguar, Land Rover deal

The workers at Jaguar and Land Rover are not the only people who praised Tata Motors for the $2.3 billion deal with Ford. Commerce Minister Kamal Nath Wednesday joined corporate India in complementing the Tata group for spearheading India Inc's globalisation drive.
"My congratulations to the Tatas and entire corporate world as they have held India's private sector flag high. The world is looking at India," Kamal Nath said at the sidelines of a meeting here.
"The most important thing is that world is recognising India's credibility," he said, adding the $2.3 billion deal was also a sign of the rising globalisation of Indian companies even at a time when there was a global slowdown.

"The acquisition of Jaguar and Land Rover has been a culmination of a process of acquisition overseas by the Indian corporate," said the Federation of Indian Chambers of Commerce (Ficci) in a statement.
"With the meltdown in US and repercussions in Europe, Ficci is convinced India Inc will have many more opportunities of buying up valuable companies in these markets, provided the growth momentum of the Indian economy is sustained."
The Associated Chambers of Commerce and Industry (Assocham) said the agreement signed by the Tatas also marks the transparent and business-like manner in which the group has negotiated with Ford, which needed to be complimented.
"The Indian industry has been doing an extremely good job in acquiring foreign assets. But the way the Tatas have done it makes India proud," said Venugopal N. Dhoot, the president of the industry lobby.
Indo-Asian News Service

Tata deal shows 'India has arrived': Sunil Mittal

Tata Motors' acquisition of the prestigious Jaguar and Land Rover car brands shows that "India has arrived" on the world scene - something American politicians now need to wake up to, Indian industrialist Sunil Bharti Mittal said Wednesday.
He spoke after meeting British Prime Minister Gordon Brown. He was leading a delegation of the Confederation of Indian Industry (CII).
"India has arrived and is being accepted by all. The welcome we are seeing in the United Kingdom is just fantastic. We are very, very proud of the house of Tatas," Mittal, president of the CII, told IANS.

"Globalisation is a two-say street. Now, it is time for American politicians to realise that globalisation benefits everybody, as the UK has understood," said Mittal, who is CEO of Bharti Enterprises.
Mittal said he was "delighted" with the news about the deal between Tata Motors and sellers Ford.
"Jaguar and Land Rover are iconic brands known to the entire world. For Tata to pick them up is fantastic," he added.
Mittal also said he had a "very good meeting" with Prime Minister Brown as a follow-up to the British leader's visit to India in January.
Brown and the 15-member delegation discussed key issues in areas of skills building, climate change and global trade talks.
"Gordon Brown wants India to fully participate in the Doha Round of Talks at the World Trade Organization. He wants us to move ahead on the NAMA discussions (on manufacturing tariffs)," Mittal said.
"He said the world will move on agriculture, so that's a message we will be carrying to (Commerce Minister) Kamal Nath."
The meeting was the third between CII members and the British prime minister in the last 18 months.
Britain is India's fourth largest trading partner globally and the second largest in Europe, after Germany.
The delegation included CII chief mentor Tarun Das, Hindustan Motors chairman C.K. Birla, and Dabur India chairman Anand Burman.
Indo-Asian News Service

British government welcomes Tata buy

Trade and Investment Minister Lord Digby Jones - who has just won a campaign to be allowed to drive a Jaguar - said Wednesday the British government welcomes the "long-term commitment" shown by Tata Motors in purchasing the Jaguar and Land Rover brands.
"The Tata Group is already a major investor in the United Kingdom, with recent acquisitions including Corus, and in automotive terms Tata Motors has also had its European Technical Centre in the West Midlands for several years," he said in a statement minutes after Ford announced the sale of the iconic brands to Tata Motors for $2.3 billion.
"We welcome their long-term commitment now to developing the Jaguar and Land Rover brands as part of their British businesses," said Jones, who earlier this month won a feisty battle against the government's green lobby to be allowed to be driven in an official Jaguar rather than a low-emission hybrid car.

"These businesses have every reason to face the future with confidence - Land Rover is at record production levels, Jaguar has exciting new products, and both brands are supported by a committed, expert workforcem," Jones said.
"UK Trade and Investment will do everything it can to promote the Jaguar and Land Rover brands around the world," he added.
Jones' comments came amid much speculation in London that Prime Minister Gordon Brown would make a statement on the acquisition by the Tatas during Question Hour in the British parliament.
Although he failed to do so, Jones gave interviews on the deal, speaking to the media all the way from Bangkok, where he is on an official visit.
Meanwhile, the UK-India Business Council (UKIBC) said the deal is an "outstanding example of the UK's open economy" and its ability to attract offshore investment and talent.
"Vodafone's acquisition of Hutch and Tata's previous acquisition of Tetley and more recently Corus are leading examples of this," said Sharon Bamford, chief executive of the UKIBC - the lead organisation supporting the promotion of bilateral trade, business and investment opportunities between the two countries.
UKIBC chairman Lord Karan Bilimoria said the purchase is the latest example of the newfound confidence of Indian companies.
"Less than two months ago, I sat in the new Tata Nano, and I witnessed history in the making. Indian companies are growing more confident in the global economy, and with this deal the country is on the move like never before," he added.
Indo-Asian News Service

Tata deal an honour for India, say analysts

Corporate analysts Wednesday hailed Tata Motors' deal with Ford Motor to buy two iconic British auto brands Jaguar and Land Rover as not just a milestone for the Tata group but a historic moment for India.
"This is a landmark deal and it is a landmark deal for India also," says Deven Malkan, a noted commentator and editor-in-chief of Corporate India magazine.
"The deal has all the ingredients of a lion-hearted industrialist. The critics had earlier tried to run down the Corus deal and look at the Tata Steel's share price today - it is flourishing," he said.

"Tata is a conservative and staid industrial house and before jumping into the deal fray everybody in the market knows that they would have first made sure of raising funds along with a study of the deal and its ramifications."
Sanjay Choksi, president of automobile appraisal group Western India Automobile Association, said: "This deal will help Tata Motors in gaining prestige and enhancing the Tata brand in the automobile world internationally."
"I think buying a readymade company also paves the way for the enhancement of indigenous automobile industry. Though the automobile industry here has a lot of tie-ups with major international giants, but this deal will certainly bring about a change in the Indian car world," Choksi said.
Hormazd Sorabjee, editor of "AutoCar", said: "It is a big thing not just for the Tatas but also for the Indian automotive industry. It means a lot."
However, he contended that the deal and the transfer of technology from the Ford Motor would not have much impact in the domestic field.
"The cars are from the extreme high-end spectrum, which means it will have limited buyers in the domestic market. But then if you look from the international band, then it will certainly have an impact on the fortunes of Tata Motors," Sorabjee said.
Moreover, Sorabjee felt that even the high-end technology transfer may not have much impact on the domestic front, "though some changes might be felt in the Indian automotive industry, in the coming days."
Indo-Asian News Service