The latest on jaguar

[etypeJohn]

From Business Week's web site today.  Its good for Ford that multiple companies are interested.


Ripplewood Moves on Ford Luxury Brands
Former Ford President Scheele comes on board to help the private equity group nail down a deal for Land Rover and Jaguar
by David Welch

 
Former Ford and Jaguar executive Sir Nicholas Scheele will lead Ripplewood Holdings' Land Rover and Jaguar acquisition efforts. Bill Pugliano/Getty Images

Another retired auto industry executive has surfaced on the payroll of a private equity firm that's trying to buy a car company. In this case, former Ford Motor (F) President and Chief Operating Officer Sir Nicholas Scheele has signed up with private equity player Ripplewood Holdings to assist in its bid to buy Jaguar and Land Rover from his former employer.

The former Ford and Jaguar executive has been hired as an industrial partner for Ripplewood and will head up the firm's efforts to buy the two luxury brands, says a source with direct knowledge of the situation. Ripplewood also has former Chrysler President Thomas Stallkamp on its automotive team.

Signal of Serious Intent
Scheele's arrival on the scene shows that Ripplewood is getting more serious and wants someone with institutional knowledge of Jaguar's problems to scour the books and the product plan. The 63-year-old Englishman is just the latest retired auto industry veteran to turn up working for private equity. When Cerberus Capital Management was looking at Chrysler, the New York investment firm tapped a slew of ex-Chrysler executives.

Ford is still just at the start of the bidding process for its British luxury brands, Jaguar and Land Rover. But a handful of players have expressed interest and proved to Ford that they are serious enough to get deeper access to internal data on the brands. Land Rover sales in the U.S. are up 2%, to about 194,000 SUVs a year, thanks to sales of the new LR2 (see BusinessWeek.com, 6/29/06 "All-New LR2"), and Jaguar sales are down 30% in the U.S., at around 75,000 cars.

Several sources involved in the bidding process say there are a handful of players still looking at Jaguar and Land Rover. Aside from Ripplewood, interested parties include India-based Tata Motors (TTM), private equity firm TPG, One Equity Partners?which is the private equity brand of JPMorgan Chase (JPM)?and Apollo Investments.

Ford spokesman Tom Hoyt refused to comment on the bidding process, except to reaffirm the company's previous statement that Ford hopes to have a deal wrapped up by the end of the year.

Insider with Union Clout
Analysts estimate that Ford could fetch at least $1.5 billion for the two brands. One investment banker estimates that the maximum a company would pay is about $3 billion.

That would be a healthy injection of cash for Ford, which lost $12.7 billion last year and borrowed $23.5 billion, partly to pay for restructuring costs. Ford has turned a profit in the second quarter, but still needs cash as it struggles to reorganize.

With Scheele on board, Ripplewood would seem to have a leg up on its rivals. Before coming to the U.S. to take on a bigger role at Ford in 2000, Scheele ran Jaguar as its chairman and chief executive. One of the advantages he brings to the table is his familiarity with the English unions representing workers at the factories.

Rival bidder One Equity also has former Ford CEO Jacques Nasser involved. Both Nasser and Scheele had top jobs at Ford when the company was laying the plans to create the Premier Automotive Group?which included, at one point, Jaguar, Land Rover, Volvo, and Aston Martin?that now have Jaguar in so much trouble.

Jaguar's Self-Inflicted Wounds
Jaguar suffers from a weak product lineup that still includes cars like the S-type sedan, which has been on the market for seven years without a major overhaul, and the X-type, which many consumers simply see as a small Ford with a Jaguar skin. Even the Jaguar XJ sedan, which is relatively new, is seen as stodgy. Its sales are down 25% in the U.S. this year.

"Jaguar's wounds are self-inflicted," says Charlie Hughes, president of brand consultant Brand Rules and a former president of Land Rover in the U.S. "It's an awful product plan."

Hughes says that whoever buys the two brands will have to return the focus to their core strengths. Land Rover is performing well right now. But the moribund Jaguar will need to push for more elegant styling if it wants to reclaim its lost glamour.

Welch is BusinessWeek's Detroit bureau chief.

[Submariner]

Even the Jaguar XJ sedan, which is relatively new, is seen as stodgy. Its sales are down 25% in the U.S. this year. 

Are peoples heads that far up their asses?

[NomisR]

Hmm, they're looking at old failed company execs to run these failed companies... yeah, that's going to revive them!!!

[sportyaccordy]

Even the Jaguar XJ sedan, which is relatively new, is seen as stodgy. Its sales are down 25% in the U.S. this year. 

Are peoples heads that far up their asses?

To the average automotive imbecile, it looks like Jag hasn't changed their design in 40 years. Unfortunately, the average imbecile is the prime customer for cars

[ChrisV]

The problem is a luxury brand going for high volumes. 75,000 cars is a lot compared to Jaguar's sales through the '60s, where they sold a total of 40,000 sedans over a 5 year period, and only about 5000 E types per year...

[TheIntrepid]

The problem is a luxury brand going for high volumes. 75,000 cars is a lot compared to Jaguar's sales through the '60s, where they sold a total of 40,000 sedans over a 5 year period, and only about 5000 E types per year...

But Chris, back in the 60s, 75000 cars was a lot! Even if they had the infrastructure and finances to build that many, no one would have bought them.

[S204STi]

But Chris, back in the 60s, 75000 cars was a lot! Even if they had the infrastructure and finances to build that many, no one would have bought them.

Not really, Chevy moved over a million cars a year IIRC.

[TheIntrepid]

Not really, Chevy moved over a million cars a year IIRC.

Wow, I didn't know that. I retract my statement.

[Tave]

The problem is a luxury brand going for high volumes.

Exactly what I've been saying!


Jaguar shouldn't be trying to turn itself into a BMW/MB/Audi.


First step on the road to recovery is a public execution of the X-type. I say pistols @ dawn, a la Buffalo Soldiers.


The S-type was a hit at launch, and by all accounts a well put-together vehicle. They need it, but like the article says, it needs some help.


Then all we need is a bit more cash in the XJ and VOILA! A slimmer, more successfull Jag.

[ChrisV]

Exactly what I've been saying!

I agree. 3 cars, a sports GT, a mid size luxury sport sedan, and a full size luxury car, like their '60s lineup. Spend on quality and luxury in all of them. And don't copy the style of other manufacturers.

But Chris, back in the 60s, 75000 cars was a lot! Even if they had the infrastructure and finances to build that many, no one would have bought them.

That's the point, 75000 cars annually is considered a failure now, but it was more in one year than they used to make over a 5 year period. They need to go back to the smaller volume at a higher quality/price point. Go back to their original core values, and build from there. Ford did them good initially by investing in quality control, but then pushed them to higher volumes than they should have been (though Ford was just trying to get back it's investment through volume sales)

[nickdrinkwater]

Even the Jaguar XJ sedan, which is relatively new, is seen as stodgy. Its sales are down 25% in the U.S. this year. 

Are peoples heads that far up their asses?

Is their own fault.  They made the XJ look exactly like the last one (to the average person).  It looked dated when it came out.  While this might be the appeal to some people, not many people want something that looks old.  Which went against Jag's plans of increasing volume.  Just because it's a brand with a lot of heritage doesn't mean it's products can't move with the times.  And be marketing properly, not in the shit way that Jaguars have been in recent times.

[ChrisV]

Jaguar sedans have been on a direct evolutionary development since the MkX/420 in '60. Somehow it's ONLY become an issue in the last couple years with people that are, as is typical with the general public, clueless. Most people don't know what they are looking at with ANY car. That evolutionary design standard, with increasing technology and ability, has served Jaguar well UNTIL they tried for high volumes. It wasn't the design that was bad, but the push for volume that was what Jag didn't need.

High tech parts and construction, modern detailing, evolutionary design, none of it bad, and it brought the beautiful Sir William Lyons styling into the 21st century. That car needs to evolve, the XK needs to evolve, and the S Type needs to be replaced. As much as I like the current S Type, it's the one that should now be revolutionary in design to compete with the BMW, Mercedes, and Audi mid-size offerings.

Then make the XJ into a serious luxury sport sedan to run with the 7 series and S class. And move the XK upmarket in ability and detailing.

[Tave]

not many people want something that looks old.?

911 anyone?

[TheIntrepid]

911 anyone?

That's the thing with the 911. The basic design may be 'old', but it's refreshed so often it always looks brand new when you see it!

[Tave]

That's the thing with the 911. The basic design may be 'old', but it's refreshed so often it always looks brand new when you see it!

I see little or no difference in the design philosophy between the two. To me, the new XJ looks new, and the older ones old.

[TheIntrepid]

I see little or no difference in the design philosophy between the two. To me, the new XJ looks new, and the older ones old.

IMO if I see a 996 or even a 993 Carrera in good condition, it still looks new. That's the thing with timeless designs.

[Tave]

IMO if I see a 996 or even a 993 Carrera in good condition, it still looks new. That's the thing with timeless designs.

That was the last model. The C5 vette looks contemporary, too.

[TheIntrepid]

That was the last model. The C5 vette looks contemporary, too.

As well as the first-gen Viper.

[nickdrinkwater]

Jaguar sedans have been on a direct evolutionary development since the MkX/420 in '60. Somehow it's ONLY become an issue in the last couple years with people that are, as is typical with the general public, clueless. Most people don't know what they are looking at with ANY car. That evolutionary design standard, with increasing technology and ability, has served Jaguar well UNTIL they tried for high volumes. It wasn't the design that was bad, but the push for volume that was what Jag didn't need.

High tech parts and construction, modern detailing, evolutionary design, none of it bad, and it brought the beautiful Sir William Lyons styling into the 21st century. That car needs to evolve, the XK needs to evolve, and the S Type needs to be replaced. As much as I like the current S Type, it's the one that should now be revolutionary in design to compete with the BMW, Mercedes, and Audi mid-size offerings.

Then make the XJ into a serious luxury sport sedan to run with the 7 series and S class. And move the XK upmarket in ability and detailing.

But Jaguar can't use the fact that people are 'clueless' as an excuse.  Even if they are, Jaguar still needs to do more to attract these people away from the German brands.  They're going the wrong way about it at the moment.

And evolutionary development is fine.  But it needs to be evolutionary.  Not standing still, like the XJ looks.

I disagree that the XK needs to evolve.  I think that is the one decent car in the Jaguar portfolio.

[Raghavan]

Jaguar sedans have been on a direct evolutionary development since the MkX/420 in '60. Somehow it's ONLY become an issue in the last couple years with people that are, as is typical with the general public, clueless. Most people don't know what they are looking at with ANY car.

I guess people just don't like sleek, classy, sexy cars anymore, huh?
The XJ is the best looking large sedan on the market right now. It's not overdone like the E60.

[ChrisV]

But Jaguar can't use the fact that people are 'clueless' as an excuse.  Even if they are, Jaguar still needs to do more to attract these people away from the German brands.  They're going the wrong way about it at the moment.

And evolutionary development is fine.  But it needs to be evolutionary.  Not standing still, like the XJ looks.

I disagree, I think the XJ looks thoroughly modern, and the people that are clueless are not the people Jag needs, they shouldn't be going after the volume market that doesn't know better. That's what caused them to be in the predicament they are in. They don't need just anyone to buy the cars, they need the exclusivity that made them in the first place.

I disagree that the XK needs to evolve.  I think that is the one decent car in the Jaguar portfolio.

What I mean by that is it needs to be left to evolve naturally over the years, like the E type did before it (that ran from '62 to '74). It doesn't need to be replaced with a radically new car when the time comes. Neither does the XJ. the S type should be replaced by a radically new design, not evolve from it's current style.

[ChrisV]

I guess people just don't like sleek, classy, sexy cars anymore, huh?
The XJ is the best looking large sedan on the market right now. It's not overdone like the E60.

I agree, which is why I think the XJ should be left to evolve in the same pattern it always has, keeping the best of Sir William Lyon's styling alive with modern updates as it goes. the XJ is very stylish, completely modern in construction and detailing, and people think it's old because it carries evolutionary clues from prior versions. Nick thinks it hasn't changed, and yet there is nothing other than a slight family resemblance to tie it to the previous versions.

Like you, I think it's the best looking large sedan on the market.

[omicron]

This is lovely:

[heelntoe]

[omicron]

My father's love can be bought by any of you for the price of a maroon Jaguar Mark 2 3.8.

[heelntoe]

My love can be bought by any of you for the price of a black Jaguar XJ40.

[etypeJohn]

Not really, Chevy moved over a million cars a year IIRC.

Sometimes much more than that.  In either 1965 or 1966 they sold over 1,000,000 Impalas alone.  I'm assuming that includes the biscayne and Belaire trim levels.  Chevy was also selling Chevelles, Corvettes and Chevy, IIs.   

[Raghavan]

[TBR]

the S type should be replaced by a radically new design, not evolve from it's current style.

Why not? It is gorgeous and a true evolution of early Jaguar sedan styling.

[jayeshks]

It's always the same old defense for Jaguar, that they overstretched the brand by trying to sell volumes.  First of all, if Porsche can sell a 5 passenger SUV successfully without diluting the brand, Jaguar has no excuses for not being able to manage a simple 3 sedan + sports coupe lineup. Secondly, the push towards volumes was driven by the desire to try to break even for once after bleeding cash non-stop for years.  Jaguar's no Bentley or Rolls, they can't sell 'boutique' cars.  Only the most ardent/deluded British nationalists would buy Jags for prices significantly higher than those of equivalent BMWs and Benzes.  That's fine if they want to end up like TVR or Morgan and be almost out of the market.