Report: Ford set to name Tata as next Jaguar, Land Rover owner
December 17, 2007 - 12:01 am ET
LONDON (Reuters) -- Ford Motor Co. is poised to name India's Tata
Motors as preferred bidder for its Jaguar and Land Rover brands,
Britain's Sunday Times newspaper reported.
An announcement could come in before the new year, with Tata expected
to pay about $2 billion, it added.
Ford, which is spinning off the British luxury marques to focus on
restructuring its loss-making North American operations, said last
week it aimed to complete the sale in early 2008.
Tata is competing in the auction for the luxury brands with rival
Indian group Mahindra & Mahindra and private equity firm One Equity
This is one of those things I am not certain about. I thought it was a
mistake when Ford bought Jaguar, and a huge mistake when they
purchased Land Rover. But Ford has invested a lot of money and effort
into fixing these two brands and I have definitely seen improvement,
particularly in Land Rover. I have to wonder if Ford isn't panicking
and selling these brands too soon. On the other hand, the list of
companies that have not been able to make money with Jaguar is pretty
long. And even BMW couldn't make a go of Land Rover. I wonder why the
Indians think they can?
I do think the association with Ford devalued the Jaguar brand in the
eyes of some buyers, but will an Indian owned Jaguar appear better?
I think Ford actually wants cash, not vague promises or junk bonds. Branson
plays a rich guy on TV, but I am not sure he could come up with the Billions
in cash Ford is asking for. Branson's cash flow allows him to appear rich,
but what do you suppose would happen if all his creditors decided to call in
their loans? The only way Branson could buy something like Jaguar from Ford
would be to get together a capital investment group. Ford's former CEO,
Nasser is making such a bid, but Ford isn't interested because they aren't
able to pay in cash. They want to give Ford a bunch of junk bonds - which
Ford doesn't need. I wish there was some way Nasser could come up with
Jaguar (and Land Rover). I'd love to see him try to make money running
Jaguar. After all, he is the nitwit that saddled Ford with it in the first
place. Before Nasser starting making the calls, Ford was planning to launch
upscale models in Europe under the Lincoln brand. Nasser tried to buy names
instead, and all it did was cost money. Even Volvo has not paid any
dividends directly, although at least Ford has been able to take advantage
of some of the Volvo design talent.
I still wonder why the Indians think they can succeed where so many others
have failed. I am guessing that eventually they think they can sell Jaguars
and Land Rovers in India in large numbers because of the "names." So for
them at least, there may be a marketing advantage worth the cost.
If they redesign the Land Rover as a real off-road SUV instead of a
rich man's toy ( the way that most of the Jeep lineup has gotten) they will
probably be able to sell quite a lot of them in developing countries. I
would guess that they aren't expecting to make money with Jag - but
probably had to take it on condition of getting Land Rover.
Exactly my point. How many people in developing countries can afford
to drop that kind of money into a vehicle that is going to be driven around
off road? Clearly it's positioned right now at foreign oil companies,
well financed National Geographic expeditions, etc.
But the Indians also have a British way of thinking. They were a colony
of Britain for about 150 years after the US was. Maybe a modified
British way of doing things will work out for them. (Of course, the
fully British way didn't work for Jag or Land Rover before.)
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