KEY POINTS:
Why is Ratan Tata happy to write such a sizeable cheque for Land Rover and Jaguar? The US$2.13 billion ($2.64 billion) the Indian conglomerate is paying for the two marques certainly crystallises an embarrassingly large loss for Ford, but that doesn't mean the price tag represents a bargain.
Ford has been very fortunate to find in Tata the one business in the world able to justify this deal. During the interminably protracted sale process, private equity bidders fell by the wayside, while no other large car manufacturer entertained serious thoughts about expressing an interest.
Tata, on the other hand, has both the financial clout necessary to buy Jaguar and Land Rover, and the aspiration to become a major player in the global automotive industry. It lacks expertise, or even a presence, in the sectors of the market occupied by either company but has the ambition necessary to overcome any doubts that Ford's well-documented problems with the brands might have prompted.
Tata will know that buying Jaguar and Land Rover gives him instant access to technology and expertise that will be hugely valuable across the company's engineering businesses.
Building such knowledge organically would take many years.
Still, Tata faces all sorts of problems in making a return on its investment.
The first is that though the two brands currently enjoy quite different fortunes - Land Rover is relatively profitable, while Jaguar is very much not - separating them would be a logistical nightmare, given the extensive integration of their production and technology.
In other words, this is an all-or-bust transaction; as Tata can't split the two businesses it must concentrate on reviving the fortunes of Jaguar, a task that is far easier said than done.
This, after all, is a company that as recently as six years ago was selling 130,000 cars a year, but is now down to 60,000 units. Sales in February were 33 per cent down on a year ago in the US and 25 per cent down in Europe.
Jaguar is flagging so badly because it is too small to compete with the likes of BMW, which sells 20 times as many cars each year, and does not have the prestige to operate in the space occupied by, say, Bentley or Rolls-Royce, which sell tiny numbers of vehicles at very high prices.
The challenge for Tata, then, is to transform the scale of Jaguar's business. This will require new models, better marketing, more innovation and, above all, huge investment. All this in a global market for cars that has massive over-capacity.
Maybe the task can be accomplished. After all, Ford has not covered itself in glory at Jaguar, with new designs poorly received and a total failure to develop new markets.
But even assuming the hurdles can be overcome, another serious problem is looming large for Tata - both Jaguar and Land Rover produce cars that are about as un-green as one could imagine. And in Europe the outlook for gas guzzlers is pretty dismal.
In 2012, the European Union plans to begin fining car manufacturers with models that don't get the average carbon dioxide emissions of their fleets below 130g per kilometre travelled.
And in the UK, it's pretty obvious the Treasury now regards it as open season on the type of cars Jaguar and Land Rover currently produce.
Tata has time to mitigate such worries and its investment in research and development projects at Warwick University - plus plans for a new automotive technology centre in Europe - demonstrate its determination to do so.
The success of the Lexus hybrid models is an example of where Tata should be heading, but there is an enormous amount of catching up to do. And it will be expensive catching up, financed by Tata rather than internally. Land Rover's profits are not sufficient to fund roll-outs of new models.
Where does all this leave the prognosis for Land Rover and Jaguar workers? The good news is that in the short term at least, Tata is committed to maintaining employment levels in the UK.
Ford's cash injection into the pension fund is also excellent news.
In time, however, the trade unions that welcomed this week's announcement may grow less enamoured with Tata.
It's very likely some production will eventually be moved to India, or at least that new models introduced to the two ranges will be produced in part by an Indian workforce. Tata will certainly not engage in the sort of wholesale outsourcing seen following Nanjing Automobile's takeover of MG Rover in 2005.
But many motoring analysts believe workers should be worried by the pricing of the deal. Moving production to a far cheaper base may, in the end, be the only way the numbers can be made to add up.
AUTO TAKEOVER
* Tata Motors this week agreed to buy Land Rover and Jaguar from Ford for US$2.3 billion.
* The price tag is less than half what Ford paid for the companies.
* Tata Motors is India's largest passenger and commercial car maker.
* It is part of the Tata Group, headed by Ratan Tata, which has a variety of interests including steel, automobiles, information technology and tea.
David Prosser is deputy business editor of the Independent.
