Ford announces sale of Jaguar and Land Rover

Ford has finally announced the sale of Jaguar and Land Rover to India's Tata Motors, confirming one of the worst-kept secrets in automotive history.

Tata will pay £1.15bn ($2.3bn) for the two luxury marques, and has committed itself to safeguarding jobs in the UK until at least 2011.

The two brands have three factories in the UK at Castle Bromwich, Solihull and Halewood, employing 16,000 people. The deal is thought to include a £300m payment towards pension liabilities for British workers

Chairman Ratan Tata has seemingly pledged his future to the British marques, commenting at the Geneva Motor Show: 'Our plan is to retain the image, the touch, and the feel of Jaguar and Land Rover.'

'We will not tinker with the brands in any way… they are special global brands and whoever acquires them has a responsibility to nurture them and enable them to prosper.'

Jaguar and Land Rover under Ford

Ford is thought to have invested over £5bn in the two brands since purchasing Jaguar in 1989 and Land Rover in 200, and although Ford does not release figures for either marque it is widely known that Jaguar has never turned a profit, while Land Rover is though to make a modest return.

Jaguar and Land Rover - along with Aston Martin and Volvo - formed Ford's Premier Auto Group – a premium group of manufacturer's designed to extend Ford's reach into the luxury market and take on the German premium manufacturers.

But the group never made money and has been broken up by new Ford President and CEO Alan Mulally in record time. Mulally arrived in 2006, Aston was sold in 2007, and there are rumours that Volvo could follow.

Despite attempts to use the same architecture and engines across its range - the Jaguar X-Type and Land Rover Freelander share the same platform - and economies of scale, Ford could never make the two brands profitable, with high costs in the UK and strong union lobbying for the two brands to remain in Britain obstructing efforts.

The ill-conceived Jaguar X-Type - an entry-level Jag was designed for the American market and shared components with the Ford Mondeo - never made money and detracted from the Big Cat brand.

Faced with a recession and a declining market at home, fierce competition from Japanese rivals and an outmoded fleet of models, Ford has been shedding cash this decade, with a record loss of £6.3bn in 2006.

Ironically on the announcement of the sale Jaguar is receiving rave reviews for its XF saloon, while the sports car XK proves as popular as ever and the large executive XJ series redesign has wowed industry journalists.

'Jaguar and Land Rover are terrific brands,' said Mulally. 'We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata’s stewardship. Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all.'

Land Rover is thought to be in much better shape, with a modern range of well-received 4x4s .

The future with Tata

Tata beat off competition from Indian manufacturer Mahindra & Mahindra and a number of private equity groups to snap up Jaguar and Land Rover.

Tata recently launched the Nano city car - billed as the cheapest car in the world at £1,250 - and has announced a raft of new models, tie-ups and investment in new technology.

'Our plan is to retain the image, the touch, and the feel of Jaguar and Land Rover,' Tata said at the Geneva Auto Show last month. 'We will not tinker with the brands in any way… they are special global brands and whoever acquires them has a responsibility to nurture them and enable them to prosper.'

Tata has stated that it will not share components or technology with Fiat, with whom it has a partnership.

The prospect that the Italian company could get its hands on such British family silver had alarmed commentators in the media.

'Tata Motors, which is engaged in focused and detailed negotiations with Ford on the Jaguar Land Rover business, clarifies that the company has had no discussions with Fiat on deployment of technologies developed by Jaguar and Land Rover,' said a spokesman.

Speaking on behalf of Jaguar Land Rover, Geoff Polites, chief executive officer, said: 'Jaguar Land Rover’s management team is very pleased that Ford and Tata Motors have come to an agreement today. Our team has been consulted extensively on the deal content and feels confident that it provides for the business needs of both our brands going forward.

'We have also had the opportunity to meet senior executives from Tata Motors and the Tata group,' Polites continued. 'They have expressed confidence in the team that has delivered significant improvements in Jaguar Land Rover’s business performance.

We feel confident that we can forge a strong working relationship with our new parent company, and we look forward to a bright and successful future for Jaguar Land Rover.'

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