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: FORTUNE: Car companies: Congestion on the auction block

06-15-2007, 07:09 AM VIA
Car companies: Congestion on the auction block
Who is going to buy Jaguar and Land Rover? Fortune's Alex Taylor outlines the likely candidates.

By Alex Taylor III, Fortune senior editor
June 15 2007: 9:26 AM EDT

NEW YORK (Fortune) -- As the restructuring of the auto industry continues at a breakneck pace, fabled car brands are going on sale like so many grapefruits in a grocery store.

First Chrysler went on the block with its Dodge, Chrysler and Jeep lines and was whisked away at a bargain price by Cerberus Capital Management.

Now, after months of vacillating, Ford has officially put Jaguar and Land Rover up for bid. At this early point in the process, it is difficult to see what the outcome will be. But it is clear that the auto industry is going through a once-in-a-generation rethinking of the principles that form the foundation of its business. With the exception of Toyota, nobody is immune.

In the 1990s, luxury brands were seen as the ideal complement to volume manufacturers like Ford. They provided an upward migration path for customers and higher profit margins than were available at the popular-priced end of the business.

So while Ford was buying Jaguar, and later Land Rover, General Motors went after Saab, and Chrysler dallied briefly with Maserati and Lamborghini. Toyota and Nissan seemed to endorse the American moves by starting their own luxury brands, Lexus and Infiniti.

But just as they mismanaged their own businesses, the Detroit Three failed to make a success of their luxury ventures. Land Rover has traveled a rocky road while Jaguar has been nothing less than a money pit for Ford, consuming upwards of $10 billion.

Perhaps there is a lesson here that has been absorbed by other automakers; they haven't been stampeding to make an offer. Fiat was rumored to be interested, but it has its own underperforming luxury brands in Lancia and Alfa-Romeo. BMW was said to be sniffing around, but having owned Land Rover once before, it isn't likely to want to go down that path again.

More likely buyers would be France's Renault, which doesn't have its own luxury brand, and Peugeot, which has a quasi-one in Citroen. But Renault's Carlos Ghosn has his hands full trying to get the automaker pointed in a new direction, and Peugeot seems more interested in exploring the lower reaches of the market than the upper ones.

Asian automakers would have a strong incentive to acquire a global brand like Jag or Land Rover with a U.S. distribution system. Ever-ambitious Hyundai is one possibility. Another is a Chinese automaker. It was the Chinese after all who snapped up the remains of MG Rover and started building cars carrying those fabled nameplates in China.

If no traditional automakers step up to the plate, how about private equity? Despite increasing interest rates, they seem to have no trouble getting access to capital. And a buyer like Blackstone, which lost out in the bidding for Chrysler, might welcome another opportunity to get into the auto business.

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06-15-2007, 07:55 AM
I have never cared too much for Taylor has an analyst but I have to admit that every now and then he has his moments, now as a journalist he plain sucks.

"Now, after months of vacillating, Ford has officially put Jaguar and Land Rover up for bid" This sentence that seems to be stating a fact, as you all know is a total fabrication. Ford has yet to put anything up for bid. They will probably end up doing it but that doesn't justify presenting a certainty that someone has as fact.

What if Ford's statement about being looking at every option for Jaguar and Land Rover ( is true and not just corporate mumbo-jumbo for "we are not ready to anounce yet"? All that Taylor's note does is to pressure Ford in favor of the side of eventually selling the English brands, and that IMHO is wrong. Journalism at the service of one side of a situation is never good.

One piece of news that hasn't have such wide coverage is the FACT that the UK goverment is closely looking at the events at Ford and may take action if they deem necessary. I wonder what would come of that?

See: British government contacts Ford over "Jaguar sale" (

06-16-2007, 11:52 PM
IMO what has killed Jag is the high price of building a vehicle in England, If Ford back 10 years ago took one of their US plants here and retooled that Plant to build Jag and LR I bet that even with selling less cars Ford woulnd be loosing so much on Jag but I just hope they give the Cat one more chance before selling

12-17-2012, 07:55 AM
Yes I have also keen interest of auction, last time when it was auction of BMW vehicle I saw a massive congestion over there.
Fortunately one of mine bid held at first and i got a BMW 7 series. :)