The Indian giant with a begging bowl

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The Independent Online

With UK car production down by a massive 33 per cent last month, Jaguar Land Rover (JLR) might be expected to turn to Tata, its deep-pocketed Indian parent company, for help.

The trouble is that JLR is not Tata's only problem child. The vast conglomerate – with interests from steel to hotels to Tetley tea – bought Jaguar and Land Rover for $2.3bn (£1.5bn) in March. But within months the world economic downturn started to bite. In the year to November, sales of Land Rovers were down by 11.8 per cent compared with 2007. And although Jaguar sales are up by more than 10 per cent thanks to the launch of the new XF model in March, the boost is not enough to offset the declines.

The latest figures from the Society of Motor Manufacturers and Traders , published yesterday, make even grimmer reading. Overall car production fell by one-third in November, and commercial vehicle output was down by more than 50 per cent.

JLR has done what it can. A voluntary redundancy programme will thin out 600 posts, and last month, 850 agency staff were laid off. It has also cut production at its three factories in at Castle Bromwich and Solihull in the West Midlands, and at Halewood on Merseyside.

But Tata as a whole is little better off. At Tata Motors, the Indian arm of the car business, lorry sales have fallen by 50 per cent and the high-profile scheme to build the world's cheapest car has been hit by scandal and delay.

Tata Steel, one of the empire's original businesses, is also reeling. With steel prices dropping through the floor, it has axed 500 UK jobs at Corus, the Anglo-Dutch steel giant it bought for £6.2bn last year, and is looking for state aid from the Dutch and UK governments to avoid further redundancies.

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