Shareholders of India’s biggest truckmaker are seemingly concerned about the company’s impending acquisition of Jaguar and Land Rover , as evidenced by the sale of stock. Since the announcement of Tata’s leading bid to Ford on January 3rd, the company’s stock fell 11 percent, despite the likelihood of reselling Jaguar soon after the purchase.
Major investor Thiyaga Rajan told Bloomberg he sold almost all his Tata shares because he thinks Jaguar and Land Rover are a bad fit for a company that specializes in ultra-low-cost cars. “I can’t see an iota of fit in this deal,” he said.
Tata, the Mumbai-based company, has been in the business of making cars for 10 years, with a recent announcement of making the Nano, the world’s cheapest car, reported to cost $2,500. What business does it have, then, with luxury cars costing more than 20 to 30 times its price, critics are saying.
While Ford , the world’s third biggest automaker, failed to make Jaguar consistently profitable since it purchased the luxury brand in 1990.
Ratan Tata, chairman of Tata Group, defends his company’s position, citing Tata plans on growing internationally in select markets.
