TCS In £800-Million Deal With JLR Digital As Part Of 'Reimagine' Strategy

Tata Consultancy Services Ltd. has entered into a strategic partnership with the digital unit of Jaguar Land Rover Plc as part of the carmaker's "reimagine" strategy.

India's largest IT services company will help the luxury unit of Tata Motors Ltd. accelerate the modernisation of its digital estate and build a new technology architecture, according to an exchange filing on Wednesday.

The new partnership, valued at £800 million over five years, builds on long-standing synergies between the two Tata Group firms. TCS will deliver a broad range of services—from app development and maintenance to cloud and cybersecurity—for the Defender-maker. That will result in a leaner, more agile and scalable operating model, the company said.

According to JLR, this new deal—through its synergies and economies of scale with suppliers—will deliver substantial savings over the next five years, unlocking free cash flow to reinvest in the company. Outside of the new contract, TCS is partnering with JLR to help accelerate its vision of modern luxury client experience tailored to different markets globally.

"Building world-class partnerships and maximising the benefits of being part of Tata Group is a key part of our 'reimagine' strategy," Nigel Blenkinsop, executive director (enterprise performance and quality) at JLR, said. "Consistent with this, we are pleased to expand our long-term relationship with TCS to accelerate our digital transformation."

"Their breadth of capabilities and deep understanding of our business will further enhance our ability to transform and simplify our digital estate at pace, ensuring we can deliver a modern luxury experience for our clients."

'Reimagine' Strategy

The maker of the iconic Jaguar E-Type is undergoing a renaissance of sorts at a time when cars are increasingly shedding valves and pistons for semiconductors and batteries.

JLR will invest £15 billion over the next five years on developing electric cars as well as autonomous driving, as part of its 'reimagine' strategy to ditch internal combustion engines and catch up with rivals. The plan includes turning JLR's U.K. Halewood plant into an all-electric facility, with the first medium-sized battery Range Rover model due in 2025.

The Tata Group itself is building a £4 billion gigafactory in the U.K. to manufacture electric car batteries. Tata Motors and JLR will be the anchor customers of the 40 GW facility that aims to start production in 2026. JLR aims to turn net carbon zero by 2039 and net-cash flow positive by 2026.

However, the electric overdrive hasn't been without its challenges.

The luxury carmaker has struggled with supply chain woes more than its competitors, so much so it has only one electric model in its line-up so far, amid an assortment of battery powered models from rivals Porsche AG to BMW AG and Mercedes-Benz.

A turnaround in sales has come as a respite: JLR wholesales rose 30% year-on-year to 93,253 units, indicating continuing improvement in chip and other supply constraints. The order book stands at 1,85,000, reflecting strong incoming demand.