Tata Completes Jaguar, Land Rover Deal
It took much longer than some had expected, but the deal is now done: India’s Tata Motors is now the owner of British makes Jaguar and Land Rover.
With the sale, the Ford Motor Company has freed itself from a pair of headaches, two huge drains on its bottom line. And with Aston Martin a previous sale, Ford’s premium car line up now consists only of Volvo, though the company may once again have the funds available to raise Lincoln up to that category.
Production To Stay In The UK
Tata Motors at first glance seems to be a terrible match for Jaguar and Land Rover, but then again there wasn’t much the two makes could do to thwart the sale though they tried. Concerns that production would be moved from the UK to India almost scuttled the deal until Ratan Tata and company assured the unions that production would remain in place.
Good-Bye Big Losses
For its part, Ford is receiving $2.3 billion for Jaguar and Land Rover, about half the price the company paid for the companies. Since buying Jaguar nearly 20 years ago the brand has lost $10 billion. Until recently, Land Rover also put up significant losses, but the company has managed to turn a small profit of late.
Gone, But Not Quite
Ford’s obligation to Land Rover and Jaguar isn’t quite over as the company agreed to pick up approximately $600 million in pension costs. In addition, Ford will continue to supply certain components including power trains for some models. Finally, Ford Motor Credit will continue to provide financing for Jaguar and Land Rover dealers for the next 12 months.
Further Reading
Car Firms Welcome Tata Takeover
Ford Reaches Deal to Sell Land Rover and Jaguar
March 27th, 2008 at 5:36 pm
I am not sure how i feel about ford selling jaguar to Tata. If the quality stays the same and price for parts goes down great. If the look and quality of the cars goes down i will be disappointed.
Only time will tell if the jaguar will still be a car
people admire.
March 28th, 2008 at 8:23 am
Jag, I fully understand. If Tata ends up moving production to India — as they promised not to do — all bets are off.
It won’t be easy to make money for Jaguar as the company lost billions for Ford. What may help is to manufacture some of the components in India, but they must be of a superior quality otherwise the brand will suffer.
Land Rover is in better shape, but Tata must treat this brand carefully too.
Jaguar loyalists need to be reassured — the next several months should be quite interesting.
April 16th, 2008 at 7:26 pm
Jaguar sold less than 54,000 units in all of 2007, down from about 70,000 units just one year prior but, with the financial backing of Tata and the hands-of-approach to management Indian execs have in store, sales could potentially double within the next couple of years.
April 16th, 2008 at 7:32 pm
Fast cars, I agree. Jaguar sales should increase as the XF is definitely a strong player. With additional models expected to roll out over the coming years, doubling their output shouldn’t be all that difficult to do.