Any tie-up with a Chinese automaker could potentially help JLR
in that market, where its struggles led to a $3.9 billion writedown earlier this year. Deeper ties between the British luxury brand and BMW would build on an existing collaboration to develop engines and electric-drive technology, though the German carmaker’s former chief executive officer in August ruled out any equity investment.
Scale has become increasingly crucial in the automotive industry as carmakers pool resources to tackle electrification and autonomous driving. The challenge is especially daunting for smaller players such as JLR, which has committed to an ambitious program to offer electric variants for each of its new models from 2020. The British carmaker was an early mover among incumbent manufacturers with the electric I-Pace crossover, introduced last year.
A global downturn that’s hit major markets has added to the pressure, and despite the many challenges of turning fierce rivals into collaborators, the pace of dealmaking has picked up.
Volkswagen AG, the world’s largest carmaker, this year agreed to team with Ford Motor Co. in areas including electrification and self-driving cars. PSA Group — the French owner of Peugeot, Opel and Citroen — last month agreed to combine with Fiat Chrysler Automobiles NV to create the world’s fourth-largest automaker by volume.
One potential obstacle for any partner with JLR is the British automaker’s financial struggles. Tata has begun to address some of these issues, providing the brand with a $910 million equity infusion to help bolster its balance sheet.
In China, JLR has struggled with quality and dealership issues. The company reported last month that sales had stabilized, helping parent Tata Motors Ltd. post a narrower-than-projected quarterly loss. The British unit is also near completion of a 2.5 billion-pound ($3.2 billion) savings drive that included thousands of job cuts worldwide.
bought the maker of the Jaguar XE sedan and the Land Rover Discovery sport-utility vehicle in 2008 for $2.3 billion. While the conglomerate is open to finding partners for JLR, it doesn’t plan on selling the unit, N. Chandrasekaran, chairman of group holding company, Tata Sons Ltd., said in an interview last month.