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After purchasing Jaguar and Land Rover from Ford, and then dumping hundreds of millions of dollars into the two British brands, Indian carmaker Tata is just beginning to see the light – thanks to the Chinese government. According to a report in the Business Standard, the Chinese government has just signed a deal with Tata for the purchase of 13,000 new Land Rover and Jaguar vehicles.
The deal is reportedly worth $850 million – roughly a third of what Tata paid for the two companies just two years ago.
Apparently the division of cars will be be 10,000 Land Rovers and 3,000 Jaguars, although there are not details on which specific models.
A spokesperson for Jaguar Land Rover (JLR) said that this deal, “provides us with a solid base on which to further build our presence in this key emerging market and is particularly welcomed at this challenging time for us and the automotive industry.”
JLR is currently undergoing a downsizing operation that will see 450 employees let go – bringing the total to 2,000 since the economic crisis started. Compared to the industry as a whole, however, both companies have fared rather well with Land Rover posting a sales decline of 17 percent in 2008 and Jaguar actually posting an increase of 8 percent over the same period.
The two companies were expected to take part in the $3.2 billion bailout from the British government and the European Investment Bank, however, that might not be quite so necessary now.
[Source: Business Standard]
UK Government to Deliver $3.25 Billion in Loans
After experiencing a December sales slump of almost 50 percent compared to the same month a year before, the British government has announced that it will provide £2.3 billion (or $3.25 billion) for automakers in the UK.
The funds are intended to assist viable companies that are suffering because of the current global economic crisis. The loads would serve to provide those companies with short term credit to outlast the recession.
The $3.25 billion shot-in-the-arm by the UK government is the latest development in the worldwide auto sector bailout with the U.S. delivering $17.4 billion, Canada freeing up $3.29 billion and Sweden recently putting forth $3.4 billion.