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Saturday, December 24, 2005

Ford Flushes More Money

I hope Ford knows what it is doing with Jaguar. Reuters reports that they are sending another $2 billion to Jag, which has not ever, as far as I know, actually made money for Ford. Jaguar has turned out to be quite an albatross.

As I have written before, I think that Ford made a big mistake buying Jaguar (and Land Rover). Jaguar has a distinct style and heritage, so brand identity is not really a problem, except for the disastrous down-market X-Type. The big question is, do consumers really want "British luxury", in the form of softly sprung powerful cars? The competition in the sport/luxury market is very tough, with Mercedes, BMW, Porsche, and Audi on the German front; Lexus, Infiniti, and Acura on the Japanese front; and Cadillac at home. Lincoln, unfortunately, is not much of a player.

What kind of great stuff could Ford have done with Lincoln, if it had invested the billions of dollars it used to buy and then (repeatedly) bail out Jaguar? Could Ford have done a Cadillac style transformation with Lincoln, moving it credibly up-market, and into a fuller line of vehicles?

Ford should sell Jaguar and Land Rover to the highest bidder, or spin them off as an independent company (how about "BMC"?).

3 comments:

Anonymous said...

As for why Ford would be so foolish, I have no idea. They should have learned from the past - the British taxpayers tossed away tons of money over decades, carrying Jaguar.

Having something "covetable" such as Jaguar's olde tyme Walnut veneer, Connolly leather and Wilton carpet as well as "the Jag look" and snarling DOHC sixes does NOT translate into profitability.

Ford should sell it off and run, not walk, away. Land Rover, too.

Glenn A.

John B said...

Re: "Could Ford have done a Cadillac style transformation with Lincoln,"

Good question. I thought the LS was a decent start - it's the only Lincoln I could ever have imagined buying. Not sure about the build quality though.

John V said...

Actually, Jaguar and Land Rover are too vastly different kettles of fish.

Your argument is valid for Jaguar, though in Europe the brand had far more of a performance image than here in the States, where any Jag owner was over 60 and often a real-estate agent impressing her customers.

But breathtakingly unoriginal styling over the last 15 years has sealed Jaguar's fate. They needed, in retrospect, to do a Cadillac: Make a clear design statement that these weren't your grandfather's Jaguars.

Land-Rover, OTOH, is in quite good shape. They have two distinct and well-respected brands. They have a very impressive new platform (the Discovery 3, aka LR3 in the States) which is also used for the Range-Rover Sport. I think the Sport's a dumb vehicle, but it clearly is selling well and only industry insiders know it's a Disco underneath.

Moreover, I believe I've read that LR is now cash-positive for Ford. And if Chrysler has Jeep, and GM has Hummer, Ford now has LR as their truly authentic 4WD brand. Makes sense to hang onto that one.

My favorite idea for Jag was the notion, floated in something I read, of sellinf it to ... Reanult! Like Fiat and other Euro brands, Renault has utterly failed to sell anything above middle-market.

Whether Ghosn could succeed where Dearborn failed is a very open question, but if the Germans own R-R and Bentley, then the French owning Jag would be the final stroke in the dismantling of the UK's native auto industry. The French would be far worse than the Americans, at least to Brits of a certain age!