By on March 26, 2008
2007102850681704.jpgWhen the chips fell, Jaguar and Land Rover (JLR) went for $2.3b to Tata Motors. After a tumble in Tata's stock price several hours ago (on the Indian exchange), shares in the Indian automaker closed only 0.1% down for the day. And what of Ford's immense legacy costs? The Blue Oval Boyz are reportedly contributing an additional $600m to JLR pension plans. Automotive News [sub] reports that FoMoCo will supply powertrains, technology and dealer financing during transition. If there was any doubt before, it's clear for all to see that Ford was ditching a liability rather than raising operating cash. Given the tens of billions Ford dumped into these two British brands, the sale makes perfect sense. But what now? How does the sale impact product and marketing plans for Lincoln and/or Volvo? And what happens to the brands cut adrift? What of Jag and Land Rover, their image, and future products? Be on the lookout for a full-length editorial exploring these issues…
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10 Comments on “Update: Ford Nets $1.7b from Jag, Land Rover Sales...”


  • avatar
    JJ

    Well, I think Ford did the right thing for themselves at least…

    LandRover is a profitable brand for now but they operate in a niche that has a questionable long-term viability at best now SUVs have fallen out of grace by so many people and perhaps more importantly, if communist, governments…

    Maybe the brand has a future when a new source for energy delivery makes burning (whatever) fuel ok again, but judging by how things are looking right now that would be really, really long-term.

    Jaguar on the other hand is a brand that always seems to have potential but has never been able to make good on it. It has some ok models now in the XK and XF but still isn’t on par with the class leaders, much less profitable.

    Furthermore it’s questionable if they’ll ever be able to create the volume necessary to be economically viable developing cars by themselves without creating a brand equity diluting barn like the X-type (which obviously, they didn’t engineer themselves), plus whether or not they should try creating this volume at all.

    All of which makes me wonder what Tata is planning for the brand at all, but I can’t imagine they just want to sell the XK and XF and that’s it. Acces to European/US market or not…

    Still, by selling both these troubled brands together Ford probably got a better deal out of it and at least now they can consolidate their English activities more easily in the accounting books.

    And they still have a small stake in AM, and who doesn’t want to have that…

  • avatar

    One thing is for sure, this British acquisition so much nicer than the last one.

    (That’s the Morris Oxford, in case you missed it)

  • avatar
    frontline

    On one hand, it was a absolute bargain for Tata,but if I were a Jag/Land Rover dealer, I would be very worried about the future of this franchise. In my opinion , there isn’t any.

  • avatar
    RobertSD

    Tata had stated that they were going to use Ford’s business plan through 2011. That includes an XJ already under development for launch sometime in late-2009 and two exploratory projects: an XF-priced coupe and an X-type done right (small, but luxurious) as far as I’ve heard.

    Tata is not known for “hands-on” management with their acquisitions. I would expect it to be more like Ford’s work with Jaguar in the last 5 years than when they launched the X-type.

    As far as perception. Most people didn’t know Ford owned Jaguar or Land Rover. Most people won’t know that Tata owns Jaguar or Land Rover. The ones that do, won’t know who Tata is. Of the ones who know Tata, many won’t care.

    Tata is getting a good deal here. Jag and LR have been significantly transformed as businesses since being acquired by Ford – they are vastly more efficient and capable of managing most aspects of their operations. Jaguar has gone from a butt of quality jokes to one of the top nameplates, and now they have the XF. Land Rover isn’t quite to Jaguar’s quality standards (understatement), but their product has been very good with sales constantly increasing up until probably this year – things are starting to age.

    But Ford no longer has those liabilities. It’s all gone. EU emissions standards are much less a risk at this point. And Lincoln now has room to grow without worrying about overlap.

  • avatar
    guyincognito

    @ RobertSD,

    Tata is gettting a good deal?? They just paid $1.7B for a big time money losing enterprise that is facing decreasing odds of success (weakened dollar, higher gas prices), that nobody else wanted, and which Ford would have given away or shut down had Tata not come around.
    As stated yesterday, I have many good deals to offer Tata…

  • avatar
    barberoux

    I think sales will really increase. I would love to be able to say to someone “Nice Tatas.” and not get in trouble.

  • avatar
    Landcrusher

    I am not to sure about Jag, but I would buy a new Defender 110, even if made in India. The best part about them was the ease of major repair. You can rebuild them ad infinitum. Even if Tata makes them poorly, you can just fix it.

    Plus, people will stop laughing at the adventure store theme.

    They should sell less bling, or change their stores to a hip hop, urban jungle theme.

  • avatar
    Landcrusher

    PS

    A 150 hp diesel is plenty. I don’t want to pay for a crap 8 cylinder. If they want to sell 8 cylinder trucks, they should source the engine from an F150, or Chevy. Sadly better reliability, and at a much better price.

  • avatar
    red dawg

    Looks like the FoMoCo fire sale continues. Wonder what they’ll hock (oops, sorry sell) next to raise cash? They have no assets anyone would wanna buy unless they unload (opps,sorry) sell Volvo and their chunk of Mazda. I predict the next things to go on the auction block for cash raising will be the mansions of the Ford family. Ford is SOL (shit outta luck) otherwise. They have already mortaged everything basically not nalied down. How many yrs. will it be before we see FoMoCo’s obit? 2009? 2010? 2011? They’ll be in chapter 11 before all this is over and done with. That is a gaurentee!

  • avatar
    Sanman111

    I have no idea what Tata us going to do with jag, but Land Rover is in pretty good hands. Tata has been building Land Rover knockoffs for over a decade (last time I was in India) and they seemed pretty good to me. Actually, there is more necessity for such a vehicle in India and they have the knowledge to make a durable SUV. Honestly, I would love to see them take LR back to its roots as a simple, bullet-proof truck with nice appointments.

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