Tata Group says needs to rationalise operations

MUMBAI (Reuters) - India's sprawling Tata Group will rationalise its operations and its 96 companies have to find a way to sustain themselves through a once-in-a-lifetime downturn, chairman Ratan Tata said in an interview shown on Friday.

Tata said he hoped to return the Jagaur and Land Rover brands to their former glory but the global downturn had made that difficult, and said the long-delayed Nano car, slated to be the world's cheapest, would be a symbol of Indian pride.

"What I have said is it is a difficult time, probably the most difficult time most of us have had in our lives, and we need to have the spirit to face up, to adapt to the hardship undoubtedly, and to rationalise our operations so that we can sustain ourselves through this difficult period," he told NDTV Profit television.

Tata Group's 96 companies include Tata Consultancy Services, India's biggest outsourcing firm, Tata Steel, the world's sixth-largest steelmaker, and Tata Motors, India's leading vehicle maker.

"Each company will have to find its own way of sustaining itself, through releasing capacity or changing the way they do business. Each one will have to critically examine what they have to do and I have mandated that each of the companies come back to us with a plan," he said.

In 2007 and 2008, Tata Group led corporate India's offshore expansion. Tata Steel's 2007 purchase of Anglo-Dutch steelmaker Corus was India's biggest foreign takeover, and in 2008 Tata Motors bought the luxury Jaguar and Land Rover brands.

But the credit crunch has affected Tata Motors' ability to fund about $2 billion of a $3 billion bridge loan taken for the purchase.

"They became available for sale and we had our eyes wide open. The companies were on the cusp of recovery, and were it not for this downturn, we would have acquitted ourselves really well," Tata said.

In the December quarter, sales at Jaguar Land Rover fell to 49,000 from 76,000 a year earlier. The brands are seen as the chief beneficiaries of a $3.25 billion worth of loans guaranteed by Britain to help its ailing car industry.

"I hope we can sustain ourselves through this difficult period and thereafter, looking back, people could say that an Indian group nurtured those British brands, kept their heritage, kept them British and put them back on the world market."

Tata said the 100,000 rupee ($2,000) Nano, which debuted to much fanfare in January 2008 but is yet to be launched commercially, would be a symbol of pride.

"I think what should stand out as an issue of pride is that a group of young engineers did something that most people said couldn't be done. They did it as Indians," Tata said.

The Nano was scheduled to be launched last year, but Tata had to shift its factory from West Bengal to Gujarat, delaying its rollout. A revised date of the first quarter of 2009 for a small-scale rollout also may be missed.