Jaguar Land Rover Snags $458m EIB Loan
Every good turn deserves another, and in response to America’s bailout of its most vulnerable automakers, the EU is investing in its least viable automakers. Having invested $547m in Saab, the European Investment Bank is announcing a $458m loan to Jaguar Land Rover, the troubled luxury divisions of Tata Motors. Automotive News [sub] reports that JLR will use the cash to develop micro- and full-hybrid drivetrains and generally improve fuel efficiency. Does this include a rumored Jaguar gas turbine hybrid? Officials won’t give details, but Tata’s Ravi Kant does go on the record to say
This will support the progress of turnaround in Jaguar Land Rover’s business in challenging market conditions, alongside cost cutting measures, increase of volumes and the improved margins strategy currently being implemented by Jaguar Land Rover
Which leads us to believe that this won’t do anything to prevent the planned shutdown of at least one of JLR’s UK plants.
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I wouldn't say JLR is one of Europe's 'least viable automakers'. In the last quarter they made a profit of 56 million pounds and that's without subsidies. Now ask how much Peugeot Citroen, Renault, SAAB, Volvo etc are loosing and tell me is this really a manufacturer that isn't viable. To make a profit in these market conditions is a jolly good result. JLR profits have recently shot up by almost 30%. This is not a sick car maker, but one that TATA seem to have bought cheap.
Comparing the EIB loans to the U.S. government bailouts is populist writing. The EU has fairly strict anti-subsidies laws and - at least in the case of the loans to Saab and J-LR - they are for the development of new technology, not for paying out dealers and offering cash discounts like in the U.S.
And while at it, the EIB has also loaned money from the same fund Saab and J-LR used to: - BMW - Daimler - Fiat - PSA Peugeot-Citroën - Renault - Volvo Cars - Scania - Volvo Trucks