Ford Motor Co, the world's third-largest automaker, will sell Jaguar and Land Rover to Tata Motors Ltd for at least US$2 billion as demand for the luxury vehicles falls at the fastest pace in at least three years.
Jaguar sales dropped 33 percent in the US and Europe in the first two months of the year. Land Rover sales fell 13 percent in the US and 7.7 percent in Europe during the period.
The purchase by Tata Motors, India's largest truckmaker, was to be announced yesterday, a person familiar with the transaction said. Ford, based in Dearborn, Michigan, is ending its 21-year investment as the US housing slump and job losses curb demand for the US$80,000 Jaguar XK and the US$93,000 Range Rover.
"These are vanity products and probably these brands will have a tough time in a weak economy," said Edwin Merner, who oversees US$2 billion as president of Atlantis Investment Research Corp in Tokyo.
Mumbai-based Tata Motors "will have trouble doing well in this sort of environment," he said.
Wall Street banks have eliminated 34,000 jobs in the past nine months in the wake of the collapse of the subprime mortgage market. US sales of luxury cars made by Jaguar, Bayerische Motoren Werke AG, Porsche SE and Audi AG have fallen this year.
Ford, which lost US$15.3 billion in the past two years, bought Jaguar in 1989 for US$2.5 billion and Land Rover in 2000 for US$2.73 billion.
Ford doesn't disclose financial figures for Jaguar and Land Rover, whose biggest markets are the UK and the US. Jaguar is unprofitable, according to analysts.
"Turning around Jaguar will be a major challenge," said Ashvin Chotai, a London-based independent Asian automobile analyst. "Tata will need to tread carefully and ensure there is no negative impact on these brands."
Tata has obtained US$3 billion of loans to use for the purchase, and Ford will contribute US$600 million to pensions for Jaguar and Land Rover workers, people familiar with the transaction said on Tuesday. "We've made significant progress," Ford spokesman Mark Truby said in an interview on Tuesday. "There are no major roadblocks."
He declined to give details.
"We're in discussions," Debasis Ray, a Mumbai-based spokesman for Tata Motors said on Tuesday.
Ford rose US$0.04 cents to US$6 in New York Stock Exchange composite trading on Tuesday. Tata Motors fell as much as 4.2 percent today to 651.1 rupees in Mumbai trading yesterday. The stock has fallen 17 percent since Ford named Tata on Jan. 3 as the preferred bidder for Jaguar and Land Rover.
The purchase would give Tata brands with histories dating back to Britain's colonial era. Tata would also gain an overseas sales network after only 10 years making cars.
Parent company Tata Group, which also owns units making tea, software and salt, is steering acquisitions by Indian firms abroad.
The group, led by Ratan Tata, bought steelmaker Corus Group PLC for US$12.9 billion last year in the biggest-ever purchase by an Indian company. The Tata Motors division signed agreements in 2003 to buy the Daewoo Commercial Vehicle Co for US$102 million, its first overseas acquisition.
INSURRECTION: The NSB said it found evidence the CCP was seeking snipers in Taiwan to target members of the military and foreign organizations in the event of an invasion The number of Chinese spies prosecuted in Taiwan has grown threefold over a four-year period, the National Security Bureau (NSB) said in a report released yesterday. In 2021 and 2022, 16 and 10 spies were prosecuted respectively, but that number grew to 64 last year, it said, adding that the Chinese Communist Party (CCP) was working with gangs in Taiwan to develop a network of armed spies. Spies in Taiwan have on behalf of the CCP used a variety of channels and methods to infiltrate all sectors of the country, and recruited Taiwanese to cooperate in developing organizations and obtaining sensitive information
Seven hundred and sixty-four foreigners were arrested last year for acting as money mules for criminals, with many entering Taiwan on a tourist visa for all-expenses-paid trips, the Criminal Investigation Bureau (CIB) said on Saturday. Although from Jan. 1 to Dec. 26 last year, 26,478 people were arrested for working as money mules, the bureau said it was particularly concerned about those entering the country as tourists or migrant workers who help criminals and scammers pick up or transfer illegally obtained money. In a report, officials divided the money mules into two groups, the first of which are foreigners, mainly from Malaysia
SILICON VALLEY HUB: The office would showcase Taiwan’s strengths in semiconductors and artificial intelligence, and help Taiwanese start-ups connect with global opportunities Taiwan has established an office in Palo Alto, one of the principal cities of Silicon Valley in California, aimed at helping Taiwanese technology start-ups gain global visibility, the National Development Council said yesterday. The “Startup Island Taiwan Silicon Valley hub” at No. 299 California Avenue is focused on “supporting start-ups and innovators by providing professional consulting, co-working spaces, and community platforms,” the council said in a post on its Web site. The office is the second overseas start-up hub established by the council, after a similar site was set up in Tokyo in September last year. Representatives from Taiwanese start-ups, local businesses and
‘DETERRENT’: US national security adviser-designate Mike Waltz said that he wants to speed up deliveries of weapons purchased by Taiwan to deter threats from China US president-elect Donald Trump’s nominee for US secretary of defense, Pete Hegseth, affirmed his commitment to peace in the Taiwan Strait during his confirmation hearing in Washington on Tuesday. Hegseth called China “the most comprehensive and serious challenge to US national security” and said that he would aim to limit Beijing’s expansion in the Indo-Pacific region, Voice of America reported. He would also adhere to long-standing policies to prevent miscalculations, Hegseth added. The US Senate Armed Services Committee hearing was the first for a nominee of Trump’s incoming Cabinet, and questions mostly focused on whether he was fit for the
RSS