Jaguar and Land Rover, two of
’s most prestigious car brands, will be sold today in a £1 billion deal to Tata, the Indian conglomerate famous for manufacturing the world’s cheapest car. The sale of the two iconic names marks the end of carmaking in Britain by Ford. It follows the Britain company’s decision to sell its other big British brand, Aston Martin, last year. Production of its own blue-badged brand cars in Dagenham ended eight years ago. US
Jaguar and Land Rover will sit alongside Tata’s other automotive assets — including the £1,200 Nano vehicle — Corus, the Anglo-Dutch steelmaker, and Tetley’s Tea.
Land Rover, Jaguar and Aston Martin were part of Ford’s premier automotive group, a division that it had hoped would deliver substantial profits. However, Jaguar struggled after Ford failed to make it a volume producer. Now Ford retains only Volvo from the original stable of prestige brands.
But both brands are now perceived as being on the rise after the launch of successful new models. Jaguar’s new XF, the replacement for the retro-styled S-type, has been hailed as having all the style and power qualities of a true Jaguar. By contrast the X-type Jaguar, the cheapest model, was criticised for resembling a Ford Mondeo after the
car group based the car on a Mondeo platform. The X-type had been Jaguar’s big hope to move into volume sales. US
Jaguars and Land Rovers will continue to be manufactured in
for the immediate future, safeguarding 13,500 jobs. The new owner will stick to business plans drafted by Ford. Ford put Land Rover and Jaguar on sale last year when it was reeling from a $12.7 billion global loss for 2006. The company decided to jettison its prime British marques to try to sort out its difficulties in its home market. Britain
Tata has been in exclusive talks with Ford since the beginning of the year after winning a bidding race that originally attracted strong interest from private equity groups working in conjunction with senior former Ford executives.
Winning the brands will open a radically new chapter in the company’s history. While Tata’s trucks dominate Indian highways and the company has made cars since 1991, acquiring the marques will represent a foray into luxury territory.
Ratan Tata, the chairman, has acknowledged that the image disparity Tata will face in owning two such prestigious brands while producing what it claims will be the world’s cheapest car: the “one lakh” Nano (one lakh is 100,000 rupees, or £1,200), which was unveiled earlier this year. But at the recent Geneva Motor Show he said: “There is no need to tinker with the brands. Our challenge is to make them thrive and grow.”
Tata’s acquisition is its second big move into the British market in just over a year. In January last year the company, whose interests run from tea plantations to IT, bought the Anglo-Dutch steelmaker Corus for £6.7 billion. Its buying spree has also included Tetley, the tea maker, Daewoo’s commercial vehicle arm and the Ritz-Carlton hotel in
. Boston, Massachusetts
Last month Ford smoothed the way for the completion of the sale by offering a £300 million injection into the pension fund. An announcement of a sale had been expected at the start of March but was delayed while the two sides finalised their future working relationship.
Reuters also has more on the pending deal's implications:
But analysts have questioned how Tata will incorporate the luxury brands into its stable of sturdy trucks and functional passenger cars, including the Nano, the world's cheapest car which it unveiled in January.
While Land Rover has generated three years of record sales with its SUVs, the fit of Jaguar is far less clear.Ford, which lost $2.7 billion in 2007 and $12.6 billion in 2006, is selling off Jaguar and Land Rover to focus on turning around its loss-making operations in North America.