Tata Motors has said its British luxury auto brands Jaguar and Land Rover, which have posted over Rs 1,700 crore annual losses, will turn profitable in two years.
The company's Vice-Chairman, Ravi Kant, said the acquisition of the two marques was not over-priced.
"You can't say that the price we paid for was over-priced. In fact out of $2.3 billion that we paid for it, $600 million went to the pension fund. So Ford actually got only $1.7 billion. So I don't think we over pay for it," Kant told a news channel.
He said the two iconic brands would come back on track and would start making profits again within two years.
"I am quite sure and very positive that in two years time, when this company starts making profits, then we can have this discussion again and find out whether we over paid for the acquisition of this company," Kant said.
JLR was officially launched in India last month. At the end of 2008-09, income from JLR sales stood at Rs 39,270.70 crore, while the loss from its operations (before interest, exceptional items and tax) stood at Rs 1,777.35 crore.
Tata Motors too suffered a net loss of Rs 2,505.25 crore in 2008-09 mainly on account of JLR.
The Indian auto major had acquired JLR last year for $2.3 billion from the US carmaker Ford. To fund this, Tata Motors had taken $three billion bridge loan.
Tata Motors had been struggling to raise long-term funds to replace the bridge loan. It has already paid $two billion and has amended the bridge finance loan agreement, under which the carmaker would have to repay the remaining $one billion by 2010.
Since the buyout, nearly 2,000 employees at JLR have been laid off and Tata Motors hinted at more job cuts.
When asked about the financial viability of the Tata Nano, touted as the world's cheapest car, Kant said, "We have not embarked on a project which is going to be a loss making project. I can assure you this project is a commercially viable project.
"We will be getting cash flow very soon and we will be getting a full break-even in a short period of time."
Conceived in 2003, the Nano project has cost Tata Motors over Rs 2,000 crore. The company shifted the manufacturing plant from Singur in West Bengal to Sanand in Gujarat following fierce political opposition. The new facility would have an annual capacity of 2.5 lakh units.
In March, Tata Motors unveiled the much-hyped Nano in the country. Offered at an ex-factory price of Rs 1-lakh, the deliveries of the small car would start from next month. The company shortlisted 1.55 lakh customers for handing over the cars in two phases.