Ford only lost hundreds of millions during the third quarter of 2007, versus the 5-something billion they torched through for the same period in 2006. Sales and revenue are up, and while we can't see it yet, there might be a light at the end of the tunnel. Of course, it could be attached to a train, but let's focus on the positive. Ford's been eyeing the sell off of some of their PAG holdings as a way to stem their ongoing losses, and it's been speculated that Volvo could be on the chopping block. For now, though, the brand appears to be something that Ford wants to hang on to. Along with the third-quarter finances, Ford announced a new stragegy is in the works for Volvo. Mulally has pledged to improve Volvos' stature as a premium product, as well as improving their cost structure (a corporate way to say make more money on the cars by driving down costs).
Volvo's platforms and technology are spread pretty liberally throughout the rest of Ford. The Taurus/Sable rides on a version of Volvo's P2 platform, and the Mazda 3, Euro Focus (yes, we know, "send it over here Ford, I'll buy one" - whatevs, you know you won't), and C30/S40/V50 are all on the C1 platform, while the EUCD platform which underpins the S80 and the new XC70/V70 wagons, as well as the upcoming Lincoln MKS. It would be hard for Ford to just cut the brand loose tomorrow, though reading between the lines makes it seem like they're positioning the Swedish automaker for future sale. The new plan includes improving the image of Volvo to a more premium status, distancing Ford from Volvo's operations, and fast-tracking product development. Making the division nearly an independent entity will increase its attractiveness when suitors come knocking, but it looks like Ford's biding its time for now, doing prep work to ensure a fat sale price when the eventuality occurs.
The internet has made it incredibly easy for groups of enthusiasts to communicate and collaborate. Gearheads benefit a lot from this. It's easy to share pictures of our beloved rides, and with services like CafePress, you can even get some cool merchandise made up. Just like the record business is going after people who allegedly stole a whole bunch of music (how about the record company contracts, which are often a detailing of how the label will pillage an artist, cloaked in the fig leaf of legalese?), Ford has decided that it didn't like a bunch of Jaguar fans making up calendars and selling them to a small group of like-minded people. The idea that there'd be enthusiasts so enamored with one of its PAG properties that they'd go through all that effort was so abhorrent to Ford that the automaker shot off a trademark infringement lawsuit to put an end to the Leaper Love Fest. Maybe Jag's next owner will embrace the fans rather than alienate them.
Just about a year ago we reported that former Ford CEO, Jacques Nasser, was interested in possibly buying Land Rover and Jaguar. It was kind of ironic, given the fact that Nasser had been instrumental in the acquisition of LR and Volvo during his tenure at Ford. Well, it's deja vu all over again as word has spread that Nasser is set to tour those British companies in the very near future. Working under JPMorgan Chase & Co.'s One Equity Partners LLC, he is expected to meet with trade union officials while there to discuss a possible purchase. No comment from Ford yet.
One Equity is seen as a master of the quick flip, having banked a 79% gain on Polaroid when they sold it after just two years of ownership recently. We're not sure what their plans for the two marques would be, but reports seem to indicate that One Equity wants Ford to retain 30% to 50% of these firms to "ensure security of engines and parts supplies." When Ford shed Aston Martin earlier this year, Ford retained a 15% stake in the company. So Nasser sets up PAG while with Ford and might end up having a hand in it being dismantled. Interesting world.
And so it goes. Another week, another rumor of a possible Volvo suitor. Ford's staked a lot of their future on Volvo technology, so it's understandable that of all the PAG brands, Volvo is the one that Ford's the most reluctant to sell. With whisperings flying as thick as 17-year cicadas, a Volvo insider has intimated that the brand's Swedish management would like to see Swedish owners return were a sale to occur. The Swedes are extremely proud of Volvo, even now there's a 3rd party set up after the sale to Ford with the sole purpose of looking after the name. Ready and willing to take up the reins, a consortium of Swedish investors, inventively named Investor AB, has already collected over half the estimated value of Volvo, and they're itching to get their brand back. Ford would retain a percentage, and the difference between what's already in hand and what Ford might ask would be raised on the Swedish stock exchange. In light of Ford's recent Q2 profit, Dearborn may just hold on to Volvo for now. The next time they're feeling the pinch, Ford would do well to remember that Volvo is the most salable piece of PAG, one that would actually bring a a decent price. We doubt they need reminding.
Up to six different potential buyers are expected to place bids for the Jaguar and Land Rover brands when the auction for the British automakers gets underway later today. In the running are private equity firms Cerberus, Ripplewood Holdings and One Equity Partners, plus new entrants Tata Motors and Mahindra.
Tata Motors is already in negotiations with Fiat over a deal to build Fiat cars in India, and together, the two may form a new joint-venture to finance the bid for the British marques. According to reports, Tata has instructed several merchant bankers to evaluate the possibility of a joint offer for Jaguar and Land Rover, and both Tata and Mahindra recently signed confidentiality agreements.
Automakers Renault and Nissan have reportedly dropped out of contention, as did Hyundai, which yesterday announced that it has no plans to acquire any companies in the near future.
It's expected Ford won't announce the winning bidder for several months as it will take time for all the companies to do their due diligence.
It doesn't seem that anyone else has shown interest in Jaguar or Land Rover – some rumored suitors have outright denied any interest – but Indian industry giant Ratan Tata is contemplating adding the luxury marques to his Tata Motors unit. Tata has set his advisory bloodhounds after the business case of making Ford an offer for the brands, which could fetch $1.5 billion together.
It seems antithetical considering Tata Motors push to develop the world's cheapest car with a $2,500 price tag. The last Land Rover we drove was thirty-eight times that expensive. It would certainly be a nice property for the conglomerate Tata Sons, parent to the automaking concern, to take on. There are more and more folks worldwide newly flush with cash and looking for cars with some curb appeal. No word has been forthcoming from Tata, rumored to have signed a confidentiality agreement with Ford recently, and Ford also offered no comment.
With Ford selling off parts of its Premium Automotive Group (PAG) one at a time, it remains uncertain if Land Rover and Jaguar will end up under the same ownership in the future. In the meantime, Land Rover is collaborating with Jaguar on a future flagship model that will draw on Jaguar's expertise to produce a new Range Rover with a lighter-weight construction that could expand both upmarket and down.
Based on a new aluminum structure called Premium Lightweight Architecture, the next Range Rover is anticipated to shed about 40% off the unpainted unibody's weight, and some 800 pounds off the curb weight. Applying the magic formula of less weight and more power from a revised engine line-up, also benefiting from Jaguar collaboration, would contribute to improved performance and fuel economy. An all-new 5.0-liter V8 could produce about 350 hp, or as much as 460 supercharged, while the existing range of diesels are anticipated to be bored out from 2.7 liters to 3 and from 3.6 liters to 4. If Land Rover chose to shoehorn in the smaller Jaguar/Land Rover turbodiesel into the lightweight Range Rover, it would create a lower model in the range, while the top-end, supercharged version could fetch as much as $200,000 and feature a full spectrum of luxury equipment to anchor the SUV's position at the top of the luxury sport-ute market.
A new styling direction, led by new design chief Phil Simmons, is expected to include shorter overhangs and de-emphasized greenhouse to give a tauter and less top-heavy appearance. If given the green light for development by Ford or by any future parent company, the Range Rover would be the first in a series of new models from Land Rover, to be followed by a new Discovery (LR2), Freelander (LR3), Defender and Range Rover Sport.
While poring over the RSS feeds today, we noticed a tiny article in Automotive News about Ford's desire to sell off both Jaguar and Land Rover. The potential sale has been in the news as of late, but this article caught our eye because it reveals a potential bidder with which we're all familiar. According to Automotive News, three private equity groups including Blackston, Cinven and... Cerberus (!) have shown interest in joining the auction for two of Ford's Premiere Auto Group brands. Cerberus, of course, is the same private equity group involved in the purchase of Chrysler from DaimlerChrysler.
While the news that Cerberus has thrown its hat in the ring for the purchase of Jaguar and Land Rover is not necessarily surprising (this is what private equity firms do, they buy stuff), the thought of a new American automaker housing the Chrysler, Dodge and Jeep brands along with both Jaguar and Land Rover certainly changes the landscape of the domestic auto industry in the near future. While Land Rover isn't in near as dire a straits as Jaguar, neither brand are performing at their peak potential. Unfortunately, neither is any Chrysler Group brand. Cerberus must really believe it has the magic touch to be getting involved with so many down but not out automakers.
Earlier this month, Autocar reported that BMW had expressed significant interest in buying the Volvo brand from Ford Motor Company early in 2007. The report claimed BMW had gone so far as to request financial data about the Swedish automaker.
Yesterday, the Swedish newspaper Goteborgs Posten threw another logo on this rumor's fire by reporting that sources within Ford have confirmed that BMW is exploring the possibility of purchasing Volvo. Another source has even claimed BMW and Ford have already begun informal talks.
Our previous post already touched on all the questions that need answering, including why BMW, which became the go-it-alone automaker after owning Land Rover left a bad taste in its mouth, would jump back into the ownership game. Also, while BMW and Volvo have distinct identities (the Ultimate Driving Machine versus the ultimate safety machine), there would at least be some overlap in their respective lineups.
Finally, while Ford has stated that nothing is sacred when it comes to its Premiere Automotive Group, of which Volvo is a member, why would it sell one of PAG's most promising brands? We have an answer for that one: Volvo's actually worth something. While many, including Ford itself, might hate to see Volvo leave the fold, the Swedish brand would likely catch a premium price on the market and help Ford fund its turnaround.
Would a BMW/Volvo ticket capture the consumer's heart? This armchair analyst is hardly qualified to give an answer, except to say that Volvo is a brand on the verge of some big things (C30 anyone?) and requires a patient parent company with deep enough pockets to see it through.
It'd be far too easy to dismiss as negligible the minority stake in Aston Martin retained by Ford after the sale, but even in the new era, Aston models will continue to benefit from its ties to the Ford Motor Corporation.
In addition to the safety systems expertise garnered from Aston's former PAG sister-company Volvo, on which we reported earlier, Ford resources will continue to have input into currently-produced and upcoming Aston Martin products. in a number of ways. First, Ford still owns the engine plant where Aston Martin's V8s and V12s are built, in Cologne, Germany. Second, even though Aston is no longer a wholly-owned Ford subsidiary, the British sportscar-maker will continue to benefit from FoMoCo's buying power in securing bulk rates on raw materials, especially aluminum. And third, Ford engineers are tipped to play an even larger role in developing future Astons, input which will come in handy especially as AM rushes to get the Rapide to market ahead of Porsche, which has been working on the Panamera for some time now.
When the sale was announced, Ford's statement read that they wished Aston Martin well in its new stage. As it turns out, they won't be leaving that up to chance.
Ford only lost hundreds of millions during the third quarter of 2007, versus the 5-something billion they torched through for the same period in 2006. Sales and revenue are up, and while we can't see it yet, there might be a light at the end of the tunnel. Of course, it could be attached to a train, but let's focus on the positive. Ford's been eyeing the sell off of some of their PAG holdings as a way to stem their ongoing losses, and it's been speculated that Volvo could be on the chopping block. For now, though, the brand appears to be something that Ford wants to hang on to. Along with the third-quarter finances, Ford announced a new stragegy is in the works for Volvo. Mulally has pledged to improve Volvos' stature as a premium product, as well as improving their cost structure (a corporate way to say make more money on the cars by driving down costs). 
Ford: "Volvo's not for sale." 
Up to six different potential buyers are expected to place bids for the Jaguar and Land Rover brands when the auction for the British automakers gets underway later today. In the running are private equity firms Cerberus, Ripplewood Holdings and One Equity Partners, plus new entrants 
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