M&M in Jaguar race for Land Rover technology

Utility vehicles and car manufacturer Mahindra and Mahindra (M&M) will go ahead with the race to acquire the two iconic British brands, Jaguar and Land Rover (JLR), primarily to tap into Land Rovers' vast technological assets.

Both the brands were put on the block by owner Ford Motor Company (FMC) owing to lack of sales performance primarily due to the ailing luxury brand Jaguar.

FMC refused to entertain requests of any bidder who expressed interest only in Land Rover as both brands were declared a 'joint package'.

Speaking on the sidelines of the CII Manufacturing summit, Hemant Luthra, executive director, Mahindra and Mahindra, said, "Work is in process. Anand (Mahindra) and Pawan Goenka are looking at options."

Mahindra will directly benefit from the technological advancements made by Land Rover, funded by FMC over the years.

Access to Land Rovers technology has driven M&M to enter the race for both the brands. "The technology that Land Rover has makes sense for M&M," Luthra added.

The bid for JLR by Mahindra and Mahindra falls in line with the company's ambition of becoming a full-fledged utility vehicle player worldwide, possessing a variety of product offerings.

In an earlier interview with Business Standard, Pawan Goenka, president (automotive sector) M&M, said, "We want to promote the M&M brand as a utility vehicle maker worldwide and we are working in line with that."

Luthra also said that by 2010, the automotive division of the Rs 18,500-crore M&M group will go for an acquisition strategy.

The company wants to aggressively pursue its North American plan, as the US remains the largest market for all types of utility vehicle, including pick-up trucks. The company has already initiated plans to launch the Scorpio in the States.

M&M has stayed away from auctions (bidding) of many companies in the recent past. Most of the acquisitions made by the company have been through direct equity buy-out of the target company.

But the company may change its inorganic business model for JLR as Luthra said, "One cannot say that we would never change our model of growth. If the best deal has to come through auction, we will go for it."

Ford's JLR auction, which is expected to be wrapped up by year-end or early next year, has seen names of many prominent bidders.

Apart from Tata Motors, M&M and One Equity, private equity players like TPG, Cereberus and Ripplewood were also interested.