Jaguar Land Rover parent company Tata is interested in pairing up its British divisions with BMW and/or Geely, a Bloomberg report from last week suggests, further cementing Tata’s stated interest in exploring partnerships rather than an outright sale of its luxury subsidiary.
Tata ruled out the possibility of selling Jaguar Land Rover in October, but in an industry that is increasingly reliant on multinational partnerships to ensure profitability, the Indian company is keen to find suitors for future development. JLR has already entered into some component-sharing agreements with BMW that includes engines and electric powertrains, while a partnership with Geely could shore up its standing in the Chinese market where it is currently hemorrhaging money, Bloomberg reported.
Company chairman Natarajan Chandrasekaran said Tata views automobiles as a “core business,” ruling out a potential sale of the unit. Tata is in the business of running companies, he said, not just investing for the sake of equity.
JLR has had a tough time of it of late. The company took a $3.9 billion writedown earlier this year and is the midst of a $3.2 billion round of cost-cutting that has included thousands of job cuts.
It’s no secret that electrification is a prime concern for companies looking for development partners. JLR could team with BMW or Geely on new shared platforms for electric vehicles or on autonomous driving technology. Both represent high development costs.
Similar needs were part of the justification for the Fiat-Chrysler Automobiles and PSA merger. Former FCA CEO Sergio Marchionne had been shopping for a merger for years, taking care to clean up FCA’s financials to make it more suitable partner. Those efforts bore fruit in October, when the two announced that they would merge. Unfortunately, Marchionne did not live to see it; he died more than a year before the deal was struck.
A tie-up between JLR and BMW is a homecoming of sorts for the Brits, as BMW supplied engines and did some platform development work for Land Rover prior to (and even briefly after) JLR’s stint under Ford ownership.