Tata: Cost barrier
Mumbai, Dec. 16 (PTI): Tata group chief Ratan Tata has ruled out any possibility of manufacturing Jaguar and Land Rover in India and has said some “silly taxes” make even their assembly here costlier than the imports.
The Tatas are setting up a plant in China, which will export these cars to different parts of the world and have been invited by Saudi Arabia as well.
“India is still making it somewhat difficult for us to offer it,” he said in an interview when asked when Jaguar and Land Rover could be manufactured in India.
“They are being assembled now (in India). Unfortunately, today if we were to manufacture here, it would cost more than the assembled one,” said Tata, who will hang his boots as the chief of an over $100-billion salt-to-software conglomerate later this month.
On the difficulties in manufacturing these cars in India, Tata said, “Because we do not have scale of manufacturing here, we are selling about a 1,000 Jaguars a year and you would need to be at least four to five times that in order to justify the investment that you would make...
“... so unfortunately, the assembly here is turning out to be more costly than importing the cars because of some silly taxes that they have been imposed on companies.”
Tata said, “The government should incentivise people to bring more investments so that it becomes a base of exports, which unfortunately is not happening and China is doing that.”
Fighting economic downturn in Europe, the Tatas are working to lower costs at Jaguar Land Rover and steel operations there, including a possible sale of any “piece of business”. However, the company will try not to cut any jobs, Tata said.
The outgoing chairman also took on those who criticise the group’s prized acquisitions of JLR and Corus as “stupid moves” because of the huge cash outgo and said they seemed to forget that an economic downturn happened soon after these takeovers.
“The steel firm is really suffering because of the downturn in Europe and the UK. All we are trying to do is to reduce our cost base so that when we come out of that recession we will have a leaner company,” Tata said.
The Nano is being “refreshed” to realise its full potential, Tata said.
“We were not prepared to market the car as we should have. I think that has a lot to do with the fact that the momentum got lost,” he said.
He listed plant transfer, insufficient advertising campaign and dealership network as the reasons behind the Nano’s failure to realise its potential.
On whether these issues are being addressed, Tata said, “It is being addressed now and I think we will succeed. It is a three-four year old product (and) we have to do something to refresh the product, which we are also doing.”