Ford Plans to Purchase a 15% Stake in Jaguar
Ford Motor Co., seeking to gain an advantage in the global luxury car wars, Tuesday announced plans to buy a 15% share of Jaguar PLC, one of Britain’s premier auto makers.
Several analysts speculated that Ford is positioning itself to buy the entire company once the British government relinquishes its majority control, a move expected next year.
Ford’s minority interest in Jaguar would mark Ford’s second stake in a prestigious British car company. It owns more than 50% of Britain’s Aston Martin Lagonda Ltd., which produces the $142,000 Lagonda sedans and convertibles. Ford is also considering a buyout of the Saab car division of Sweden’s Saab-Scania AB.
The auto maker is hardly alone in its quest for prestige by acquisition. Chrysler Corp. in 1986 bought Italian auto maker Lamborghini, maker of cars starting at $145,000. Chrysler is also collaborating with Maserati of Italy in producing the $30,000 Chrysler TC two seater on sale in the United States.
European Market Quest
General Motors Corp., the nation’s biggest car company, bought all of Britain’s Group Lotus in 1986. Lotus makes the Esprit Turbo, which starts at $70,645.
The American car companies are going after the high-image European automobiles to boost their standing in the luxury car market at home and abroad, said Harvey E. Heinbach, an auto industry analyst with Merrill Lynch.
“Ford has made it clear that it is interested in having a more upper-end car available for its European clients, where Ford does not have a full product line,” Heinbach said.
The “halo” or “rub-off” effect of owning prestigious European marques might also help U.S. car companies in the hotly contested luxury car market in their home country, Heinbach said.
Luxury cars now constitute 10% of U.S. auto sales, two-thirds of which go to domestic manufacturers. But all of Japan’s top auto makers are chasing luxury car dollars, which could erode the domestic makers’ share. Jaguar has been losing money, largely because of a 5% decline in its U.S. sales, the company’s second-largest market outside of Britain. Jaguar sells about 20,000 cars a year in the United States.
