Exercise part of drive to combine operations under single firm.
Tata Motors is looking at a further tightening of resources at its British-based luxury car brands, Jaguar and Land Rover.
When it bought the two brands from Ford Motor Company last year, it inherited 20-odd national sales companies. It is now looking at consolidating some of these through a restructuring exercise, which means a loss of jobs for people working in these companies of JLR. However, the reduction in the number working in the distribution companies may largely happen outside the UK. According to Tata Motors, about 2,000 people are working in national sales companies outside the UK.
C Ramakrishnan, chief financial officer, Tata Motors, said: “As we go along, we would undertake the restructuring of some of these national sales companies, towards maybe consolidating them on a regional basis or on a grand basis.” Ramakrishnan was talking to analysts on the consolidated performance of Tata Motors in a conference call.
JLR’s sales companies are spread across countries such as South Africa, Canada, Japan, Korea, US, France, Italy, Spain and Germany, to name a few. JLR is planning to open a new sales company in China, which already has a network of 50 dealers.
The sales companies are responsible for official imports of all Jaguar and Land Rover vehicles and their distribution to all dealerships in its region. It is also responsible for monitoring dealers, parts supply and post-sales services to customers. There are some sales companies which sell only one of the two brands. This may give way to a combined operations of both brands.
“We may try to get combined JLR operations and get (it under) single companies. We have got about 2,000 people in the national sales companies outside of UK. There is some scope for reduction,” added Ramakrishnan.
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In addition, Tata Motors wants to further rationalise its operations to contain costs, as part of the severe drive it has initiated with the help of consultants KPMG and Roland Berger. The company has already announced the shutting of one of every three facilities during the course of the next decade.
Meanwhile, the company is keen on replacing the senior who retire from the workforce with people younger and ‘cost effective’. The company is expecting its labour expenses as a percentage of sales to come down.
“A number of initiatives have been launched in this direction, both in terms of internal consumption, productivity increases, as well as better sourcing efficiency, including low-cost country resourcing,” Ramakrishnan added.