JLR and BMW: prospect of a new partnership?

Insiders told Bloomberg that Jaguar Land Rover owner Tata has approached the Bavarian OEM as it looks for partnerships to drive down costs. Another company that Tata allegedly reached out to is Geely, the Chinese group that owns Volvo, Polestar, Lynk&Co, Lotus, Proton and London Electric Vehicle Company.

Developing electric and self-driving cars is a tremendously costly ordeal. Previously, JLR and BMW announced they would co-develop electric powertrain tech, but the Bavarian CEO then ruled out a deepened relation in the shape of equity investment.

A global downturn hitting major markets has put the pressure on smaller OEMs such as JLR to look for scale enhancement. 2019 has been tough year for the Indo-British group, which wants to offer an electric variant for each of its new models from 2020 onwards. The next model to become electrified would be the upcoming Jaguar XJ.

Mergers, acquisitions and partnerships

If BMW and JLR shake hands, their collaboration will probably take the shape of an industrial partnership rather than a merger. BMW Group is far bigger a player than JLR, incidentally, so an acquisition of the latter by the former would make more sense. Still, Tata has no intention to sell JLR.

Previously, VW and Ford said they would be working together on the development of electric and autonomous vehicles. Two weeks ago, PSA and FCA announced they would be merging.

Even BMW and Daimler are cooperating nowadays – not in the technology department, but in the mobility arena. Last year, the once arch rivals surprised the automotive world by saying their mobility businesses would merge to spread the costs and be more competitive.