This time, it's between two very familiar brands.
The automotive industry is undergoing major changes right now. The development of new mobility solutions, the shift from internal combustion to all-electric, and mergers and partnerships are all happening before our eyes. In order to survive, banding together is often the best bet for many brands, no matter how big or small. Case in point: the proposed $50 billion PSA-FCA merger. But another potential partnership is also being discussed.
As we all know, Jaguar Land Rover has faced financial struggles. Though it's in better shape now, Brexit is presenting its own set of issues. JLR's parent company, Tata Motors, also recently posted some troubling losses.
Today, a report from Bloomberg claims Tata is seeking a new partnership to help share the costs of EV investments and other related areas. So, who is Tata interested in working with?
The report names two companies: BMW and China's Zhejiang Geely Holding Group. The BMW approach has been previously rumored, but now it appears Tata is serious. Bear in mind JLR and BMW already have an existing collaboration where the latter provides engines and electric drive tech. BMW's now-former CEO did rule out any sort of equity agreement, but the keyword there is 'former.' Harald Krueger's successor, Oliver Zipse, might have other plans. Both BMW and Tata declined to comment, while Geely denied any contact with either automaker.
Despite JLR being one of the first major automakers to launch a mainstream all-electric luxury crossover, the Jaguar I-Pace, one major issue has yet to be resolved: scale. The I-Pace's platform was designed to be modified for additional models, but sooner or later more EV architectures will be needed. JLR simply doesn't have the finances to make that happen at this time.
What JLR brings to the table is excellent global brand awareness and prestige. A global downturn in major markets hindered the automaker's momentum. Aside from the PSA and FCA merger, Volkswagen and Ford have agreed to a cooperation deal in electrification and self-driving cars. Could JLR and BMW be up to something? What about Geely? As of now, Tata has no intention to sell JLR but a partnership with someone seems very likely.