Experts say Tata Motors is reaping the rewards of not interfering after Jaguar Land Rover posted pre-tax profits of £924 million for a single quarter.
The Gaydon car giant sold £5.3 billion worth of cars for the quarter to June 30, an increase of 22 per cent on the same period last year – which was itself a record.
Warwick Business School associate professor of strategic management Christian Stadler said the performance was masking tough times elsewhere for JLR’s owner, Mumbai-based Tata.
However, he said the firm was enjoying deserved success from taking a different approach to the 2008 takeover.
Dr Stadler said: “Most acquisitions fail, but Tata has used a new approach that seems to be used by a number of successful Indian conglomerates. The acquisition is followed not by ruthless integration but partnership. They take a very hands-off approach.
“They might shape the composition of the top management and provide capital but do not try to run the day-to-day operations. Most western companies are considerably more interfering.
“When Ford owned JLR, they certainly were more involved. Synergies are less of a concern than for Western companies.
“Tata supported JLR financially at the beginning and of course they also made sure that communication between JLR and Tata Motors was in place, but JLR have more or less been allowed to do their own thing, especially where the operations are concerned. That is something of a new phenomenon.”
Latest accounts from Tata Motors show the parent group enjoyed a net profit of £526 million across the quarter.
JLR, which it purchased from Ford in 2008 for £1.3 billion, sold 115,596 cars in the three-month period.
“This reflects solid global demand for the new and refreshed Jaguar and Land Rover line up, particularly for the Range Rover, Range Rover Sport, Range Rover Evoque and the Jaguar F-Type,” the group said.