Jaguar, Land Rover To Be Put On The Trading Block
|Topics: Ford Motor Company, Jaguar, Land Rover
June 14, 2007
Earlier this year, the struggling Ford Motor Company sold the majority shares for the ultra-luxury brand Aston Martin as the company aims to bolster its sagging financial status. It can be remembered that the Dearborn-based car manufacturer posted its biggest lost last year. With the sale of Aston Martin and the continuing financial woes for the car manufacturer, it is expected that Jaguar and Land Rover will follow soon.
Earlier this week, Ford announced that they have taken the services of two firms to determine the future of the two European brands. Investment banks Goldman Sachs, HSBC Holding Plc and Morgan Stanley were hired by the car manufacturer to find willing buyers of the two British luxury brands.
After the sale of Aston Martin, Ford initially denied rumors that they will sell the remaining brands in their Premiere Automotive Group (PAG) which is composed of European luxury brands. Recently though, as United States sales slow down, the company is in need of money to invest on their core operations.
Tom Hoyt, a spokesman for the company, has this to say: “As we’ve consistently been saying since last year, Ford Motor Company has been assessing a number of strategic options for all of our operations, as any responsible company would do. Ford is actively investigating its options in terms of other possible actions, and we’re not ruling anything in or out.”
The company, through Hoyt, also said that, “We are working with our financial advisers to determine the best future for Jag and Land Rover.” Both the luxury brands are expected to be sold by the company as slow sales for the brands are hindering the progress of the company. As sure as the Ford Probe and its accessories like Ford Probe hood protector has been discontinued by the company, the sale of the two British brands are inevitable.
While both Jaguar and Land Rover are expected to be sold by Ford, the only Swedish brand in the Premiere Automotive Group is safe for now. This does not mean though that Ford will not sell Volvo. While sales for the Scandinavian brand are slowing down in the United States, it is turning a profit for FoMoCo outside of North America.
While Ford is yet to formally announce that they are going to sell of Jaguar and Land Rover, analysts are already quoting the price that Ford could fetch for the brands. Jon Rogers, an analyst with Citigroup, says that for Jaguar and Land Rover, Ford could cash in about $8 billion. For Volvo, which is more successful than both Jaguar and Land Rover, it is estimated that Ford can get $7 billion for the brand.
Meanwhile, British Prime Minister Tony Blair is in touch with Ford in the expected sale of the Two British luxury brands. “We still believe that both Land Rover and Jaguar are highly successful companies and will have a highly successful future,” says the official spokesman of the prime minister.
There are also questions as to why Ford will sell the two brands from British. David Osborne, the national officer of the Unite union, says that: “We are very concerned to hear these reports and we are seeking an urgent meeting with Jaguar/Land Rover. We find it difficult to understand why Ford would want to sell a successful, growing and environmentally improving brand like Land Rover, and a marque like Jaguar, which is a significant player in the luxury market and one that Ford has invested heavily in.”
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