Ford may sell luxury brands Jaguar and Land Rover

Ford Motor Co. has announced on Tuesday that it is reviewing its position on the makes of Jaguar and Land Rover. Speculation is rife that the Dearborn based company may be thinking of selling the two British brands that comprise Ford’s Premier Automotive Group along with Volvo. The company has declared in the past that it has been thinking of selling the two brands.

Ford had bought Jaguar in 1989 and Land Rover in 2000 with the aim of getting a berth in the luxury vehicle market. The Premier Automotive Group had originally included Jaguar, Land Rover, Volvo and Aston Martin. The latter was sold earlier this year for $848 million. Both Jaguar and Land Rover have seen a steady decline in sales the past couple of years. Rumours also suggest that Ford is seriously looking to dispose off Swedish carmaker, Volvo to BMW, though it has been vehemently denied by the company.

The Financial Times of London has reported that Ford has enlisted the help of Goldman Sachs, Morgan Stanley and HSBC for advice. The newspaper has also said that the company is already in the first stages of making the sale. Sources within the company have declared that the project had been internally dubbed ‘Project Swift’ since the company had decided to speedily sell the two luxury brands.

Dave Osborne, national officer of the unite union has said, “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”. Even Tony Blair’s office has remarked about the decision that Ford has taken. The Prime minister’s official spokesperson said, “We still believe that both Land Rover and Jaguar are highly successful companies and will have a highly successful future”.

Analysts are of the opinion that this step is being taken by Ford to generate funds for new products. Ford, in the past has resorted to selling basically the same car under a different name, which has proved to be quite unpopular with customers. In fact General Motors and Chrysler long ago dropped this practice. Added to that is the losses incurred by Ford through the Jaguar and Land Rover brands while Asian automakers have flooded the Western markets with fuel-efficient models.

The question on everybody’s mind at present is whether Ford will get top price for both brands since each comes with baggage of its own, say analysts. It is alleged that Fiat had been interested in Land Rover but has now backed off from the deal. Jack Nerad, editorial director for Kelley Blue Book said, “These days, not that many car companies would be takers for these companies, and the car business is a very difficult one for non-car company people to move forward in.”