Little interest shown in Jaguar, Land Rover
When Aston Martin was up for bid a few months ago, billionaires that nobody has ever heard of were coming out of the woodwork to bid on the ultra-luxury lineup. Now Ford is trying to recapture the magic with the sale of its other two premium British Marquees, Jaguar and Land Rover. The problem is, Jaguar is a cash whore and Land Rover doesn't have nearly the cachet of Aston (big surprise). We've heard differing accounts as to the worth of Ford's unwanted PAG members, but Merrill Lynch pegs the number at between $1.3 billion and $1.5 billion. That certainly isn't chump change, but it's only marginally better than the $900 million that was paid for smallish Aston. Many of the "small-time" billionaires aren't bothering with this sale, even at lower financials, because they couldn't afford one of Jaguar's big-time losses, and stalwarts like Blackstone are rumored to be out, too. Hyundai and Nissan/Renault don't seem to be interested either.
Ford already brunted a lot of the financial pain for Jaguar when it closed a plant and bought out a lot of workers, and the forthcoming XF should help the bottom line immensely. Land Rover is profitable and has plenty of newer models to keep sales strong for the foreseeable future. We'd be surprised if there weren't a lot of sand-baggers that show up soon looking to get something for next to nothing.
[Source: Auto News - sub. req'd]
Reader Comments (Page 1 of 1)
Long Road Ahead 8:13PM (7/10/2007)
You mean no one whats a Ford Mondeo in Jag Drag? Land Rover's reputation for off road ability is equal only to their horrendous record of reliability. Add that to expensive UK labor costs and you have fiscal disaster. Ford made a mistake. Sorry Bill and Alan time to cut and run.
Reply
Brooks 8:37PM (7/10/2007)
Cache = something hidden
Cachet = prestige/exclusivity
http://wsu.edu/~brians/errors/cache.html
Reply
BCM 10:28PM (7/10/2007)
Good luck. This distinction has been pointed out to Chris before, but I think he's one of those people who believes using highfalutin' words makes them look intelligent, but using them correctly makes them look pretentious.
Torqued 9:02PM (7/10/2007)
I could see Hyundai buying Jaguar. They are trying to move upstream into the luxury market, but the Hyundai name will hold them back.
The Jaguar name is not only loaded with tradition and heritage of high-end luxury, but it's even pronounceable by westerners. :)
Seriously, if Hyundai quality is really improving as much as people say, this could be a great opportunity to buy into the luxury demographic. People who don't read autoblog often don't even know who owns what companies.
Reply
Don 9:20PM (7/10/2007)
First offer you get, Ford...dump these PAG losers.
Reply
Devin 9:26PM (7/10/2007)
PAG will be profitable once Jaguar gets the XF out. That is all it will take. Ford needs to stop thinking short term cash and start thinking about long term investments. Jaguar needs to concentrate on a smaller company status (not like that's hard to do for them now), and start producing luxury models that really compete for buyers, and the XF will do that.
Reply
British_Rover 9:50PM (7/10/2007)
You know what is going to happen? Ford is going to dump Jaguar and then sweeten the pot with a profitable turned around Land Rover just as Jaguar actually gets its act together.
BMW did the same thing when it dumped Land Rover on Ford. They figured no way was Land Rover fixable. In addition by leaving key bits of technology and features out of the Mark III Range Rover design they probably figured that that Land Rover was sufficiently hobbled to protect the X5.
Less then five years after the sale Ford gets them turned around and profitable. Land Rover has had record world wide sales for 2005, 2006 and is on pace to do it again in 2007. The new LR2/Freelander 2 has been completely bulletproof so far. I haven't seen a single problem with the car and for a Land Rover launch that is unheard of. Even the Range Rover Sport as good as it was had some initial hiccups in the first three months. Not a single LR2 has come in for an initial quality problem since the launch.
Watch the same thing happen with Jaguar. Jaguar is even better shape then Land Rover was in the Summer of 2000 when Ford bought them. Back then Land Rover had no modern products out. The Disco was old, the P38 was Older, the Defender was dead in the US and the Freelander was well lets not talk about the Freelander.
At least with Jag you have a brand new XK that is selling well. The XJ that is a great car but the styling is putting people off. I personally like the styling as all the other cars in its class look the same. The S-type is bad but the XF will be here soon to replace it. The X-type is worse but hopefully LR2/Freelander 2 production will increase to the point that they can finally kill the X-type.
Reply
SM 10:19PM (7/10/2007)
Here's an idea...don't sell either company for awhile...
Take Land Rover's design (that would be L3/Range Rover) and slap directly onto Expedition/Explorer/Escape. Then you'll sell some cars.
Take Jaguars design (upcoming design that is) and slap it on Mercury and Lincoln.
Deal with the fact that you don't sell any of these gorgeous cars and let their spirit live vicariously through Ford Lincoln Merc...cheap way to REALLY boost sales of your SUV lineup, make Mercury sexy, and establish Lincoln as the de facto luxury car.
Somebody will say how much that would cost! Well, you're still only stamping a hood, tailgate, 2 doors, 4 quarter panels, and a roof with the same amount of steel.
Reply
British_Rover 11:45PM (7/10/2007)
That is about the dumbest thing I have ever heard. Land Rover and Jaguar's vehicles are a lot more then just their styling. Do you know that when Land Rover was working out the final design for the LR3 they took an LR3 and a Expedition through the Mojave desert to check the chassis strength of the LR3? The Expedition got its back broken and the front windshield glass got ejected out of the car by all the chassis flex.
toroeau 10:37PM (7/10/2007)
BTW, the word is cachet -- not cache.
Reply
Johnny Rocket 12:14AM (7/11/2007)
Get a free F-150 whenever you purchase a Ford subsidiary!
The XF isn't enough to save a whole firm. It needs other products, and the other sedans. Land Rover...well, let's just say both companies are in the same state as they were twenty-five years ago. How we got back there, I don't know.
Reply
British_Rover 3:25PM (7/11/2007)
Oh come on can you be anymore ignorant? Twenty-five years ago Land Rover had ZERO official presence in the US market. The largest New Car market in the world and they didn't sell a single new car there. Land Rover only made two vehicles. The series III later to be renamed the Defender and the Classic Range Rover.
Now Land Rover sells four models in the North America and five models to the rest of the world. The North American Market is their Largest market and they have set world wide sales records for the last two years. They are on track to set another sales record this year. The new Land Rovers are much, much better in reliability as well. The LR2 has been completely perfect and I can already see that influence moving into the other models.
To say that Land Rover is in the same shape it was 25 years ago is to be completely ignorant of Land Rover's current position in the market and their position in the past.
Rene Curry 12:19AM (7/11/2007)
The problem with selling Jaguar & Rover is the buyer needs Ford's part bin to be competitive.
I think the problem with Jaguar was they should have focused more on the body & interior designs and transplanted more Ford components into the designs.
They can still do this and fix Jaguar & Rover. Then decide to keep or sell.
They should sell Volvo. I think it is at the cycle peak. Sell high, not low. In the future, or even now many manufacturers can compete with Volvo on safety & reputation.
Reply
omar 7:45AM (7/11/2007)
i think they should get rid of Volvo also, because i dont like Ford and I love Volvo Cars. But to be honest, Ford is not going to get a sale for Jag/Rover and if they do only a tiny 1.5 or so billion. Now sell Volvo and you have 8 to9 may be even 10 billion for that sales agreement. Volvo still has one of the best safety records that very few makers could compete with (SAAB, Mercedes and Volvo travels together).
I would hate to see Jaguar go to the Koreans and even to the Chrysler group. but i doubt that Ford is even going to capture the eyes of any for a sale.
I could bet you that the day Ford finally realize that they need to sell Volvo bidders around the globe will come foward to get a taste of Swedish life.
But I know it now, Ford will have to sell Volvo for extra moneys, they wont lose all shares. So for that reason Volvo will go to a private comapny namely Investor AB Swedish runnned family. Volvo will once again be back home completely in Sweden. Ford will still benefit from some technologies, and Volvo will still be able to build and use Ford platforms to increase product range. Volvo now out of Fords wiery hands will begin to flourish taking on the best of the premium brands in their own way. New cars like a CLS Class fighter will arrive(Volvo C90), a new R Class fighter(Volvo XC100 or V90), a nice sports car or two(C40 or new nomenclature) , and finally a Volvo first, a S Class fighter (Volvo S100)
For is actually holding back Volvo because of lack of funds, just look at the delay in the new S60 sedan. Look at the delay in production of the XC60. No word on the production of the XC100. No planned designs or specs on the next XC90. All of this is actually because of Ford financial state at this time as said on motor authority.
Watch all of this unfold slowly hopefully. But the sales of Volvo from Ford is coming into the light more and more every day.
omar 7:52AM (7/11/2007)
is it just me or is there something wrong with most British auto brands. i said most so that wont include Aston, Mini, Bently, and Rolls. All the rest have already went to the morgue and who havent died are located in ICU. Jag and Rover are in a tough spot that I dont think they could get out by a sale alone. They are going to need to hang on with Ford for a while, and Volvo is going to have to pack up its seat at the PAG board table and high tail it back to Sweden under the rule of the wealthy Swedish family that owns Investor AB.
Reply
Colin Smith 1:56PM (7/11/2007)
True luxury is reliability.
And imminently, economy, which will trump all other categories.
If the brands can't deliver both these two there is no point.