Since Ford announced the sale of Jaguar-Land Rover, there has been much speculation on who the buyer will be. I will look a little further and in particular, who would benefit more.

I�ll discount private equity firms as potential buyers, the present credit crunch makes this less likely.

TATA
The Indian conglomerate, and various Chinese car companies would clearly have the money but they would lack the experience and management skill in shaping these companies into producing a profit. Short of closing the UK factories and moving production closer to home, they would likely continue to haemorrhage money. And such a move would cause so much disruption (bad publicity, production difficulties, quality issues both real and especially perceived), they would risk destroying the brand and goodwill. Also, their present respective range of cars isn�t really a good fit with Jaguar-Land Rover. I can�t see the TATA Indico (a poor mans wretched City Rover �remember that) standing next to a Range Rover in the showroom. That said, TATA is the clear frontrunner and almost certainly the buyer. One high point of interest with TATA ownership is their close ties with Fiat. Fiat owns Alfa Romeo and Maserati (amongst other brands), which could really benefit by sharing with JLR, technology, platforms, parts and car development. Together they could be so much more than the sum of their parts and JLR dealer network in the US would be very appealing for Alfa Romeo and Maserati.

Renault-Nissan and Toyota
Both of these massive car companies can bring the same benefit to JLR. Their supreme management talent would bring JLR to profitability. They have expertise, money and technology to help in the next generation of JLR cars. They can bring massive savings by sharing parts, platforms and dealers with Lexus or Infiniti. They also have a presence in the UK with existing and established factories, which could be expanded whilst running down Solihul and Coventry in a politically neutral way. Since Lexus is well established in Europe, so Toyota has less to gain and unlikely to be buying. Also buying brands is not Toyota�s way; they like to establish brands from scratch and grow them organically. And who can argue with the success. I can remember critics sneering when Toyota established Lexus shortly after Jaguar was bought by Ford. They were so sure Ford had gone upmarket the right way. They�ve been eating humble pie for many years now�.
Nissan is just about to introduce Infiniti in Europe and follow in Lexus�s footsteps. Infiniti started of well in the US and then suffered from dull designs �much like the rest of pre-Ghosn Nissan. However, it has revived over the last few years and should be a hit in Europe, but it would be easier and cheaper with JLR. Ghosn�s revival of the basket-case Nissan has been so impressive, JLR should pose no problems. Nissan should seriously consider buying JLR.

Peugeot-Citroen
The PSA group would have a very good fit with JLR. And provide PSA something which they don�t have and ache for: a slice of the prestige cake. But there would be big problems. PSA couldn�t reduce costs by sharing parts and platforms. The last time PSA took over a troubled high-value brand, they ruined it in order to save costs. Citroen could have been the upmarket brand PSA so crave, but years of stifling has reduced it to little more than a bargain basement discounter. Granted, things are improving at Citroen but JLR would fear PSA. PSA also has a quality weakness which is exactly not what JLR need. I think PSA aren�t financially flush enough to be serious contenders. Anyone remember the last time PSA bought a brand from the Americans: Talbot from Chrysler. Enough said.

Honda
I think Honda would be perfect for JLR. Honda is a big and successful car manufacturer with an emphasis on technology; massive experience in UK first with Austin Rover and then its own plant in Swindon. Honda�s upmarket brand, Acura is much weaker than Lexus or Infiniti so they would have the most to gain from JLR. And platform-part sharing would be an option. Honda probably does have the management expertise in tame JLR, especially as some production can be transferred to its existing UK factory. Another strength and ironically also the reason Honda won�t be too keen is, uniquely it has first hand knowledge of many of the problems. Having partnered Austin-Rover (and therefore Land Rover), it has and idea on the middle-management intransigence which lie at the heart of the quality-financial mismanagement of the company.

It will be interesting to see what happens. TATA will probably be the buyer �here�s hoping they make the most of the Fiat link.

Return to Amistad Home.

This article is sponsored by Proqul Ozone store who supply the Ozonology Sanitisation service.

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