Tata approaches BMW, Geely in hunt for Jaguar Land Rover partners, report says
Tata Group, the owner of Jaguar Land Rover, has approached companies including BMW and China's Zhejiang Geely Holding Group as it seeks partnerships for the beleaguered UK automaker, people with knowledge of the matter told Bloomberg.
Tata has said it's open to finding partners for JLR to save on costs and share the burden of investing in electric vehicles.
The deliberations were at an early stage and Tata could still approach other potential partners, the people said, asking not to be identified because the information is private.
Any tie-up with a Chinese automaker could potentially help JLR in that market, where its struggles led to a $3.9 billion writedown earlier this year.
Deeper ties between the British luxury brand and BMW would build on an existing collaboration to develop engines and electric-drive technology, though the German automaker’s former CEO, Harald Krueger, in August ruled out any equity investment.
It was not immediately clear how receptive Geely and BMW were. "There have been no talks with Tata or JLR," Geely said in a statement. BMW declined to comment, as did Tata.
Scale has become increasingly crucial in the automotive industry as automakers pool resources to tackle electrification and autonomous driving.
The challenge is especially daunting for smaller players such as JLR, which has committed to an ambitious program to offer electric variants for each of its new models from 2020.
JLR was an early mover among traditional automakers with the Jaguar I-Pace full-electric crossover, introduced last year.
A global downturn that has hit major markets has added to the pressure, and despite the many challenges of turning fierce rivals into collaborators, the pace of dealmaking has picked up.
Volkswagen Group this year agreed to team with Ford Motor in areas including electrification and self-driving cars.
PSA Group last month agreed to combine with Fiat Chrysler Automobiles to create the world's fourth-largest automaker by volume.
The Jaguar I-Pace full-electric crossover, shown, competes with battery-powered cars such as the Tesla Model X and Audi e-tron.
One potential obstacle for any partner with JLR is the automaker’s financial struggles.
Tata has begun to address some of these issues, providing the brand with a $910 million equity infusion to help bolster its balance sheet.
In China, JLR has struggled with quality and dealership issues. The company reported last month that sales had stabilized, helping parent Tata Motors post a narrower-than-projected quarterly loss.
JLR is also near completion of a 2.5 billion-pound ($3.2 billion) savings drive that included thousands of job cuts worldwide.
Tata Group bought JLR from Ford Motor in 2008 for $2.3 billion.
While the conglomerate is open to finding partners for JLR, it does not plan to sell the unit, N. Chandrasekaran, chairman of group holding company, Tata Sons, said in an interview last month.