Former Premier Group

[markfnc]

I was reading wiki (you know how you get off track there), but was looking at Fords buying and selling history.

 

This was a huge money loser.

 

Jag bought for 2.28 b

Land Rover bought for 2.9 b

Volvo bought for 6.5 b

 

Jag and land rover sold for 1.7b

Volvo sold for 1.5 b

 

Yikes, thats a 8.48b loss.

 

[silvrsvt]

Would have cost billions more to keep them and investing in new platforms and stuff...money Ford didn't have.

[twintornados]

Ford gained a lot of technology experience from their time owning those brands....the Volvo tie up alone created the genesis of the D3 chassis (P2 in Volvo parlance) that is still in use today....aluminum construction methods from Jag and Land Rover that put Ford light years ahead of the others.....

 

It wasn't all bad.....

Edited September 15, 2015 by twintornados

[SoonerLS]

Those "bottom line" figures don't take into account what Ford got out of those relationships, like experience with 'loomnum from Jag or the Volvo DNA infused into the D3 and CD4 platforms. Also, from what I was told by more than one Ford engineer, Volvo engineering was well integrated into Ford's engineering operations before the sell-off.

[Biker16]

JLR has done very very Well without Ford and constantly generates high margin. To me it proves that the culture within ford Is not compatable with that of low to medium volume makers like JLR and Mazda.

 

JLR became more nimble and innovative after the separation from Ford.

[blazerdude20]

I was reading wiki (you know how you get off track there), but was looking at Fords buying and selling history.

 

This was a huge money loser.

 

Jag bought for 2.28 b

Land Rover bought for 2.9 b

Volvo bought for 6.5 b

 

Jag and land rover sold for 1.7b

Volvo sold for 1.5 b

 

Yikes, thats a 8.48b loss.

 

While directly the loss on Volvo was quite large, I'd argue that Ford got its money's worth out of that deal. They got platforms that are still apart of the product lineup (though heavily revised) and a wealth of knowledge on safety.

[RichardJensen]

http://www.autoextremist.com/current/?currentPage=2

 

But despite a stunning array of new Jaguars like the gorgeous F-Type Coupe, Jaguar sales are lagging, to the point that it’s grossly underperforming in the market. Jaguar marketers have found out - the hard way I might add - that having a significant historical legacy isn’t necessarily enough to motivate buyers in today’s market. And the reality for Jaguar is that its raison d’etre in this market is slipping, despite the slobbering fan boy reviews and splashy TV commercials.

So what is a brand like Jaguar supposed to do? The options are limited to say the least. Jaguar can’t out-German the German luxury automakers by chasing every segment niche – both real and imagined – because the brand couldn’t pull it off, even if it wanted to. And Jaguar can’t go all Kia on us overnight and head too far down market, because it would be totally inappropriate and simply disastrous for the brand, eventually killing it off altogether.

 

 

http://www.telegraph.co.uk/finance/newsbysector/industry/11790096/Jaguar-Land-Rover-profits-plunge-as-car-sales-miss-a-gear.html

 

"China accounted for 20pc of JLR sales but maybe as much as 80pc of profits last year," he said. "The stock market crash and economic slowdown [in China] are denting premium car sales, and there is pressure on pricing as the government looks at the prices firms charge."

 

 

JLR have been a boom/bust proposition for decades now.

 

--

 

Let's hold off on praise for Tata's stewardship until we see what happens when they have to replace the platforms they got at a discount from Ford.

Edited September 15, 2015 by RichardJensen

[Biker16]

http://www.autoextremist.com/current/?currentPage=2

 

http://www.telegraph.co.uk/finance/newsbysector/industry/11790096/Jaguar-Land-Rover-profits-plunge-as-car-sales-miss-a-gear.html

 

 

JLR have been a boom/bust proposition for decades now.

 

--

 

Let's hold off on praise for Tata's stewardship until we see what happens when they have to replace the platforms they got at a discount from Ford.

 

they already are replacing ford platforms right now. Imagined Richard a RWD/ AWD archteture that spans C-E both CUVs and Sedans. its like a dream isn't it?

Edited September 16, 2015 by Biker16

[RichardJensen]

Yes. Replacing platforms & profits are plunging.

[jpd80]

Options:

1. Keep J/LR and Volvo and fund next product cycles for all - up front costs close to $20 Billion ( those nifty "profit earning" vehicles)

 

OR,

 

2, Sell all three makes and use that cash to improve Ford brand.- not waiting years to see a return on $20 billion investment..

 

 

Notce that J/LRs main revenue generators are now lower cost models with similarly lower profit margins

compared to J/LR's traditional full sized cars and Utilities. This means the pressure is on to at least

double sales to maintain the same profit stream to replace platforms - that's tough buisness

and a lot less margin for error if the economy tanks and sales go backwards..those things happen.

Edited September 16, 2015 by jpd80

[papilgee4evaeva]

Yes. Replacing platforms & profits are plunging.

 

It's just EUCD in the JLR fold now, right? Underpinning the Evoque, Freelander, and Discovery?

 

As long as that platform has been around, and as many vehicles it has underpinned, it's gotta be house money at this point with those three.

 

Unfortunately, with all the new models out in the past 5 years (XE, XF, XJ, F-Type, F-Pace), Tata's house isn't but so big.

[Edstock]

Notce that J/LRs main revenue generators are now lower cost models with similarly lower profit margins

compared to J/LR's traditional full sized cars and Utilities. This means the pressure is on to at least

double sales to maintain the same profit stream to replace platforms - that's tough buisness

and a lot less margin for error if the economy tanks and sales go backwards..those things happen.

 

its like a dream isn't it?

[RichardJensen]

 

It's just EUCD in the JLR fold now, right? Underpinning the Evoque, Freelander, and Discovery?

 

As long as that platform has been around, and as many vehicles it has underpinned, it's gotta be house money at this point with those three.

 

Unfortunately, with all the new models out in the past 5 years (XE, XF, XJ, F-Type, F-Pace), Tata's house isn't but so big.

 

AFAIK, they've stretched the aluminum DEW as far as they can as well.

 

It's the basic economic reality of these small mfrs. TANSTAAFL. They can't invest in their products to the same extent as BMW, VAG and MB, while generating comparable profit margins, when their revenue is a fraction of those companies'.

[papilgee4evaeva]

 

AFAIK, they've stretched the aluminum DEW as far as they can as well.

 

It's the basic economic reality of these small mfrs. TANSTAAFL. They can't invest in their products to the same extent as BMW, VAG and MB, while generating comparable profit margins, when their revenue is a fraction of those companies'.

 

As of the introduction of the '16 XF, DEW is done. XE, new XF, and F-Pace all ride on the same platform. So there's a fair bit of sharing going on there, though the XJ and the F-Type are on bespoke platforms.

 

That said, the initial cost of these platforms must be astronomical, and I know Jaguar doesn't manufacture enough XF taxis draped in vinyl in order to speed up the amortization schedule (looking @ Mercedes).

[Biker16]

Yes. Replacing platforms & profits are plunging.

 

source?

 

and be nice.

 

Options:

1. Keep J/LR and Volvo and fund next product cycles for all - up front costs close to $20 Billion ( those nifty "profit earning" vehicles)

 

OR,

 

2, Sell all three makes and use that cash to improve Ford brand.- not waiting years to see a return on $20 billion investment..

 

 

Notce that J/LRs main revenue generators are now lower cost models with similarly lower profit margins

compared to J/LR's traditional full sized cars and Utilities. This means the pressure is on to at least

double sales to maintain the same profit stream to replace platforms - that's tough buisness

and a lot less margin for error if the economy tanks and sales go backwards..those things happen.

 

Where did the 20 billion Number come from.

[lfeg]

Thing is that if you read the trade publications, looks like JLR is banking on going downmarket to increase volumes. I hope they are not planning on keeping the same margin levels on their downmarket offerings.

[Hugh]

http://www.tatamotors.com/

 

Here is but a snapshot of the length and breath of their operations. This in of itself shows the possiblity of Tata throwing money at JLR and turn them loose in the lab as it were. Something Ford couldn't or wouldn't do. A good lesson learned regarding overreaching your goals.

[RichardJensen]

 

source?

 

I already posted a link to an article discussing plunging profits at JLR and their dependence on the Chinese market.

 

And speaking of JLR's profits coming primarily from China--I would be very curious to know how you would pay for a new platform engineered in Britain if most of your profits are coming from a JV in China.

[Edstock]

 

And speaking of JLR's profits coming primarily from China--I would be very curious to know how you would pay for a new platform engineered in Britain if most of your profits are coming from a JV in China.

 

By check?

[RichardJensen]

I think it's rather difficult to repatriate profits from Chinese JVs. So the question is how you turn those profits into cash that can be used to pay for new product?

[bzcat]

Ford could have developed several new Taurus and Explorers with the $6.5 billion dropped on Volvo. I'm not convinced what Ford got out of that deal was worth it. EUCD also wasn't worth the money either because Ford Europe probably would have end up on the CD3 program without Volvo.

 

But that was sunk cost... I thought selling Volvo was not a great decision. Yes, Ford got some cash from selling it to Geely but it gave up a pretty good brand. Unlike JLR, Volvo products were highly complementary with "One Ford" and would not have cost a lot of money to operate. What Volvo really needed was a NAFTA zone production site but Ford could never get it together.

 

Jaguar was a bad investment all around and I blame the eurocrats that were running Ford at the time for even coming up with the idea. Land Rover probably would have worked with some more time had Ford been in better financial position. The Evoque project began under Ford so they had the right product idea and strategy.

 

That one that really stings is letting go of Mazda, which was almost immediately drawn into the Toyota orbit. Not only it deprived Ford of a viable 2nd brand in Asia, it gave Ford's chief rival a strategic boost.

Edited September 16, 2015 by bzcat

[Anthony]

Thing is that if you read the trade publications, looks like JLR is banking on going downmarket to increase volumes. I hope they are not planning on keeping the same margin levels on their downmarket offerings.

Didn't that go not so great when Ford tried it? How do they expect to do it right this time?

Edited September 16, 2015 by Intrepidatious

[SoonerLS]

Didn't that go not so great when Ford tried it? How do they expect to do it right this time?

Ahh, the late, unlamented X-Type..

[Biker16]

 

I already posted a link to an article discussing plunging profits at JLR and their dependence on the Chinese market.

 

And speaking of JLR's profits coming primarily from China--I would be very curious to know how you would pay for a new platform engineered in Britain if most of your profits are coming from a JV in China.

 

Richard,

 

I am not disputing that the chinese market is drving down JLR profit, but I am disputing that their Drop in profit Was due to their investment in product.

 

As I believe was your assertion below, maybe I misunderstood you comment.

 

Yes. Replacing platforms & profits are plunging.

[Biker16]

Ford could have developed several new Taurus and Explorers with the $6.5 billion dropped on Volvo. I'm not convinced what Ford got out of that deal was worth it. EUCD also wasn't worth the money either because Ford Europe probably would have end up on the CD3 program without Volvo.

 

But that was sunk cost... I thought selling Volvo was not a great decision. Yes, Ford got some cash from selling it to Geely but it gave up a pretty good brand. Unlike JLR, Volvo products were highly complementary with "One Ford" and would not have cost a lot of money to operate. What Volvo really needed was a NAFTA zone production site but Ford could never get it together.

 

Jaguar was a bad investment all around and I blame the eurocrats that were running Ford at the time for even coming up with the idea. Land Rover probably would have worked with some more time had Ford been in better financial position. The Evoque project began under Ford so they had the right product idea and strategy.

 

That one that really stings is letting go of Mazda, which was almost immediately drawn into the Toyota orbit. Not only it deprived Ford of a viable 2nd brand in Asia, it gave Ford's chief rival a strategic boost.

 

CD3 wasn't a good fit for FOE, don't forget EUCD is an Expansion of C1, AKA C1+. Without PAG EUCD would have been even more similar to C1 as it was.

 

I'll say it again Ford had no idea what to do with a medium volume manufacturer like JLR. There solution with the X-type was to build a high value plant to make a Slightly differentiated Ford.

 

the consequence of the failure of the X-type to meet projection was burdening a medium volume maker with the Debt and overhead of high volume maker. Of course they lost money. Ford's culture simply doesn't do small well.

 

the common misconception here is that the same rules apply to JLR as apply to Ford, which is the same mistake Ford made when investing PAG.

 

JLR until recently hasn't increased Overhead by adding new facilities, they have instead invested in modular platform and engines that meet the needs of a medium volume automaker.

 

Didn't that go not so great when Ford tried it? How do they expect to do it right this time?

 

Its RWD, and a good car.