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It was only three months ago that Jaguar was to remain in Ford’s Premiere Auto Group portfolio, but a recent uncovering by Automotive News Europe, and another report by the Detroit News shows that this is definitely not the case. As a matter of fact, it appears that Ford is closing down the entire PAG division, putting Jaguar, Land Rover and Ford on the block shortly after selling off Aston Martin. Last year, PAG, as a group, lost $327 million USD. To be clear, while a premium division, Lincoln is not part of PAG despite initially being clumped into the group.
In the report, Automotive News stated that several months before Alan Mulally, president and chief executive officer of Ford made his statement with regards to Jaguar in April that Ford was in talks with Fiat over two of the PAG brands. Fiat became interested in both Jaguar and Land Rover for the technologies they possess and for their position in the marketplace. Land Rover would’ve been ideal, as none of Fiat’s five brands offer any off-roading products. Fiat also liked the idea of Jaguar’s aluminum platform technology, plus its V6 and V8 engines. The fact that the Italians were interested in both brands would have also solved the problem about separating the two tightly intertwined British nameplates, not to mention that it would be an established outlet for Fiat to sell vehicles in North America.
In the end, the talks between the two companies broke down simply because the overall net loss generating combination of Jaguar and Land Rover would have damaged Fiat’s credit rating.
According to sources, Ford will be keeping sale consultants Morgan Stanley and Goldman Sachs on board in their continuing search for potential suitors. And who might those suitors be? The Nissan-Renault partnership was rumoured to be a possible buyer for Jaguar and Land Rover, though it announced yesterday morning that the benefits of owning a luxury brand were non-existent in the short term. Nissan also owns Infiniti, and knows how difficult it is to lure buyers away from traditional German brands in the high-end sedan segments where Jaguar currently fights for attention.
The sale of Volvo, on the other hand, is much more surprising to us. Last month the Swedish brand was reportedly the object of discussion with BMW as a provider of front-wheel drive platforms and a potential mate for future MINI products. Ford has officially denied any intentions of selling Volvo to BMW or any other carmaker for that matter, but with a projected value of $8 billion USD, it would certainly provide an infusion of much needed cash. Ford has benefited from its relationship with Volvo over the past few years, incorporating global architectures, its safety expertise and its previous chief designer into its North American operations. Likewise, poke around the interior of a Land Rover or Aston Martin and some of the switchgear is similar between models.
Currently, Ford’s official statement is that the sale of any of the PAG brands is purely speculative, though a spokesperson said, “the Ford Motor Company is continuing to assess a number of strategic options for all of its operations.”
If the news of the sale of the brands that comprise PAG is true, it will definitely change the luxury automotive world from the state that it is in today. Ford’s flip-flopping may also deteriorate the official’s credibility when it comes to official press releases, although, like politics, it’s understandable that they’d want to keep speculation to a minimum during negotiations. The proverbial cat now out of the bag, look for an official announcement in the near future.
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