The two British-based brands have long been the subject of speculation about their future within the Ford empire, and until recently top brass at the Blue Oval have denied the marques are for sale. But now it has appointed Goldman Sachs, HSBC and Morgan Stanley to broker a deal in a bid to make inroads into the company’s parlous finances – last year Ford lost $12.6 billion.
Following the sale of Aston Martin earlier this year for nearly £500 million, the move heralds the end of Ford’s Premier Automotive Group (PAG) division. Only Volvo will remain under Ford ownership. PAG lost $2.3 billion last year, although the group is expected to turn a profit this year.
Ford has refused to confirm or deny the sale, saying there was “no news” but the company was continuing with its “on-going business review”.
Although Land Rover is in a healthier financial state than Jaguar, it is seen as almost impossible to separate the two brands, which is why Ford is considering bundling them together in a joint sale. The companies share many back-office functions, engineering units and even manufacturing at the Halewood plant on Merseyside.
Last year Land Rover sold nearly 43,000 cars in the UK, although the introduction of the Freelander 2 and V8 diesels in the Range Rover family have seen sales rise by 3% for the year-to-date (May).
However, Jaguar is struggling and in 2006 sold 23,000 cars in the UK. For the year-to-date its sales are down by 17%. Despite the launch of the acclaimed XK sportscar range, the company’s core offerings are struggling thanks to ageing designs in the X-Type, S-Type and XJ ranges. The XJ has recently been the subject of a mid-life revamp while the XF (the S-Type’s replacement) is due later this year.
But both brands suffer from having a limited presence in fleet. In 2006, Land Rover sold 13,000 models and Jaguar 10,000. In comparison, BMW sold 56,000, Audi 45,000 and Mercedes-Benz 31,000 units.
No bidders for Jaguar and Land Rover have been confirmed yet, but Fiat Auto has denied it is in the frame, and Renault-Nissan has also distanced itself from reports it was interested.
It is thought that private equity companies, like the consortium that bought Aston Martin, will be the likely buyers.