Automakers ink $1.7 billion deal for British luxury-car builders
The Associated Press
updated 8:53 a.m. PT, Wed., March. 26, 2008

DETROIT - Ford Motor Co. is selling its storied Jaguar and Land Rover businesses to India’s Tata Motors Ltd. in a deal that will net the U.S. automaker $1.7 billion — roughly a third of the price it paid for the two luxury brands.

The deal announced Wednesday will expand the Indian carmaker’s reach around the globe and give Jaguar and Land Rover badly needed capital to update and expand their product lines.

The sale had been in the works for months as cash-strapped Ford sought money to fund its turnaround plan.

Tata will pay $2.3 billion for the British brands, but Ford will pay about $600 million into the Jaguar-Land Rover pension fund when the deal closes, Tata’s statement said.

Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000. But the Dearborn-based automaker has been struggling and wants to focus on its main brands.

Selling the companies at such a loss clearly shows buying them was a mistake for Ford, said Erich Merkle, vice president of auto industry forecasting for the consulting company IRN Inc. in Grand Rapids.

“How can you call it anything else?” he asked. “You have to cut your losses at some point. It’s been draining them of cash and resources.”

The net proceeds aren’t enough to rescue Ford’s finances, but the sale will allow the company to focus on its core Ford brands, Merkle said.



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I felt that this is more relevant to the car section than current events. Feel free to move if not.
Anyone know anything about Tata?

Saw the news..... but I mean.... who drives a jag or a rangerover here? Maybe..... 1% of the soompi pop? maybe less than 5% of the entire Asian population?

i thought jaguar was privately owned now? ahh this is sad news.

Jaguar failed with their S-type design. The s-type just never could compete with its rivals, the 5 series and E-class. This is why they made the XF but its too late now.

Tata Motors is an Indian Company that is trying to build the worlds cheapest car at 2500 dollars. The fact that the car is pretty much made out of plastic and has a 33hp 0.5litre engine will basically make it not usable in Europe or the Americas but Tata is still insisting then can sell it there because its cheap but will it pass safety regulations?

I'm surprised they didn't sell Volvo away. If Volvo trucks corporation bought the Volvo cars corp from Ford, i'd be glad to buy another Volvo in the future (Ford screwed over Volvo since their ownership in 1999).

Volvo is beginning to look a lot more appealing. The fact volvo did not get sold yet is probably because it is selling. Volvo and ford do share a lot of engines and platforms which also plays a huge part in Ford keeping Volvo.