When Ratan Tata Bought Jaguar to Take His Revenge

Every time I hear the word revenge, I happen to recall the well-known story of how Ratan Tata redefined the word. I had had an entirely different idea of what revenge means before I read his story.

In case you are wondering who he is, he is an Indian businessman, investor, philanthropist and chairman Emeritus of Tata Sons. He was the chairman of Tata Group, a Mumbai-based conglomerate from 1991–2012.

Back to 1998, Tata Motors under his chairmanship came up with TATA INDICA, a car that would revolutionalize the passenger car industry in India. Though it was launched in 1998, Tata had had on his mind the idea of making a super-mini car that would be modern and economical right from 1990. The design was almost ready by 1994 and it was officially announced in 1995 that India’s first indigenously made passenger car would soon be launched. But the production process wasn’t as easy as it had seemed. Tata Motors was a truck making company back then and they had to go through many adversities due to their inexperience in that section. Finally, TATA INDICA was launched in 1998 and Tata’s steely determination made it possible.

Result? – The experiment turned out to be an utter failure. He had no other option other than selling the whole passenger car business. Ford, which was already a behemoth in passenger car business was inclined to consider the proposal of buying the whole passenger car division. Ratan Tata, along with his team flew to Ford Headquarters in Detroit to discuss the deal.

Now starts the main story. The executives at Ford talked to Tata in a condescending manner and were openly insulting him. One official even asked him – “You do not know anything, why did you start the passenger car division at all?”

Tata did not retort the humiliation though he had felt deeply embarrassed. Without finalizing the deal, he returned to India. He was found profoundly engrossed in thought throughout the journey. Don’t know what he had in his mind at that time, but it sure was something that changed the fate of Tata Indica.

Tata Motors re-engineered Tata-Indica based on customer feedback. Marketing was innovative with tag lines like “The Big… Small Car” and “More car per car” and it turned out that within a couple of years, it emerged as the largest-selling car in its segment.

He had his revenge, didn’t he? No, not yet.

In 2008, nine years past the meeting, Ford was on the verge of bankruptcy. It was incurring losses from its Jaguar-Land Rover. Ratan Tata came to their rescue by offering to acquire the brands for 2.3 billion dollars which amounted to 9300 crore INR at that time.

Bill Ford, along with his team, reached “Bombay House” which is the headquarters of Tata Group. The deal was finalized and Jaguar-Land Rover was acquired by Tata Motors.

In the meeting, Bill Ford, the chairman of Ford said to Ratan Tata, ” You are doing a big favor for us by buying Jaguar- Land Rover”. It was an understandably perfect moment for Tata and Bombay-House was filled with an air of sweet revenge.