How did iconic British automakers Jaguar and Land Rover become parts of the same company? And who owns them nowadays?

The short answer, at least to the second question, is that both British icons are now owned by  Mumbai-based Tata Motors (TTM), a subsidiary of India's vast Tata Group conglomerate.

The longer answer is a little more complicated, but it tells us a lot about how the global auto business has changed in recent years -- and how it's likely to change still further in the near future.

A Land Rover seen in a rear-view mirror.

Image source: Getty Images.

Ford brought them together, and then sold them to Tata Motors
Until Tata acquired them in 2008, Jaguar and Land Rover were both part of Ford's (F 0.17%) Premier Automotive Group, or PAG.

Ford had acquired Jaguar Cars in 1989, hoping to use it as the basis for an aggressive global push into luxury vehicles. Eventually, it was folded into PAG, a new Ford division that ultimately included the Aston Martin, Volvo, Land Rover, and Lincoln brands as well.

Ford's interest in luxury cars had everything to do with profits: Generally speaking, luxury vehicles have higher profit margins than mass-market models.

Nothing illustrates this more clearly than the recent experience of the Volkswagen Group. VW's Audi and Porsche brands generated just 16% of the group's total sales in 2014 -- but they brought in 62% of its operating profits.

Ford has long been reliant on profits from North America, and especially reliant on profits from pickups and SUVs sold in the United States. The idea behind PAG was to create another significant source of profits in order to reduce Ford's reliance on the U.S. truck market. 

But it never quite panned out, and then-new CEO Alan Mulally dismantled PAG as part of his plan to turn Ford around. Aston Martin was sold to a group of investors, Volvo to Chinese automaker Geely, and Jaguar and Land Rover went to Tata Motors for $2.3 billion in 2008.

For Tata, Jaguar Land Rover has been a profitable acquisition
Ford never managed to turn a profit with Jaguar or Land Rover, but Tata has managed to turn the two into a thriving business. Part of the reason for Tata's success is that while Ford tried to integrate Jaguar into its global product plan with mixed results, Tata has essentially run the two as a separate business -- and as a high priority.

That has worked out well so far. Jaguar Land Rover's sales have doubled over the last five years, and Tata has invested over £10 billion in new products and facilities for its luxury unit. Quality has taken a sharp turn for the better, too: Jaguar placed third in the most recent J.D. Power Initial Quality Study, ahead of all three of its big German luxury-sedan rivals.

And profits have followed. Jaguar Land Rover earned £2.6 billion (about $4.1 billion) in pre-tax profits in the year ended March 31, with a EBITDA margin of 18.9%.

But Jaguar Land Rover sold just 462,209 vehicles over that period, far behind luxury leader BMW's 1.8 million sales in 2014. Big investments will be needed to close that gap.

But can Tata make the big investments needed to compete?
Land Rover is thriving, but the core of Jaguar's model line is dated. The brand has put a lot of money and effort into launching its F-Type sports car, but its XJ and XK sedans are overdue for updates. A new compact sedan, the XE, should help boost sales -- but Tata will have to find a way to invest in the rest of the product line if it hopes to keep up with the Germans.

That said, with sales and profits solidly up, the future looks pretty decent for Jaguar Land Rover. The match-up may have seemed like an unlikely one back in 2008. After all, what did an Indian maker of (mostly) commercial trucks know about British luxury? But seven years later, it's clear -- so far, at least -- that Tata has been a good owner for Jaguar Land Rover.