Britain’s venerable Jaguar and Land Rover brands are now owned by a former colony: India.
Ford (F) officially unloaded the Jaguar and Land Rover businesses late yesterday to India’s Tata Motors. Tata is paying roughly $2.3 billion to acquire both brands, but Ford is paying about $600 million into the Jaguar-Land Rover pension fund.
Ford had purchased Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000. Ford wasn’t able to make either business work.
Ford had grand visions of turning Jaguar into a luxury brand that competed with Mercedes-Benz and BMW in both volume of sales and quality. However, the transformation never worked, as the cars sold poorly and Ford could not lure in younger buyers with the “conservative” car. Jaguar U.S. sales dipped 24% last year.
And Land Rover didn’t fare any better. Even before oil prices started making the gas guzzlers obsolete, Land Rover placed last in J.D. Power and Associates’ rankings of initial quality and dependability in 2007.
This deal epitomizes the failures of modern-day Ford.