After a rocky road, Ford Motor Co. is selling Jaguar and Land Rover to Tata Motors Ltd. for $2.3 billion. Ford acquired Jaguar for $ 2.5 billion in 1989 and bought Land Rover from BMW AG in 2000 for $2.75 billion. Both brands were supposed to be a good fit for Ford, which was developing its Premier Auto Group to grab sales in the European luxury car market.
Both brands were hurting to be acquired.
Here's a sample of the thinking when Ford purchased both of the companies.
On Land Rover: "Ford, if it executes well, should be able to take advantage of its large existing scale in sport utilities by combining the Land Rover and Ford truck platform," a Merrill Lynch & Co. analyst told the
BBC in 2000.
Commenting on the acquisition, in a
press release, Land Rover's then-new chairman and chief executive officer Bob Dover said:
"We are very pleased and proud to have acquired such a famous and distinguished vehicle maker. We are aware of the company's heritage and proud tradition, and will maintain and enhance that reputation. ... We will become profitable by growing the business through rising sales, and by careful cost management."
Carprices.com had this in an article on its
site:
[W]ithout Ford Land Rover might have had no future at all. Land Rover
is currently part of the ailing Rover Group that has been a
dead weight around BMW's neck since it bought the wilting company for
$1.2 billion in 1994.
In the late 1980s, Ford needed a global luxury brand to compete with BMW and Mercedes-Benz AG. That was Jaguar. In 1989 an analyst at Merrill Lynch in New York told
The New York Times:
''A number of companies are interested in having a greater exposure to the luxury car market in Europe and the U.S., and obviously the Jaguar name would be a prime attraction. For Ford 'the Jaguar distribution system in the United States could be used as a base to sell other products; I'm thinking specifically of the Merkur line, which has not done very well at Lincoln-Mercury.' ''
From another
New York Times article in 1989:
"One of our first tasks will be to discuss with Jaguar management its plans for future model development and the actions necessary to expand its manufacturing and product development resources,'' said L. Lindsey Halstead, chairman of Ford of Europe. ''Our intention would be to increase Jaguar's sales volume.''
Analysts expect Ford to invest $1 billion or more in Jaguar to double or triple its output and have it manufacture a high-volume car that would sell for $30,000 to $40,000. Ford has failed to score much of a success in either that market or the one that Jaguar is already in: luxury cars that sell for $40,000 to $60,000.
Ford tried unsuccessfully to establish a European luxury import franchise in the United States.
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Maria Woehr
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