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Ford Motor Co has finally announced today that it has signed a final agreement to sell Jaguar and Land Rover brands to India’s Tata Motors.

The sale of the two luxury marquees has been dragging on for almost a year with Tata outbidding all the rivals for a multi-billion dollar deal.

Ford now plans to focus on stabilising its global operations and making the most out of its platforms. The automaker calls it the “One Ford” global transformation.

Once the minor details are worked out, Jaguar and Land Rover will be in Tata’s hands by the end of the next quarter. Ford has disclosed the final sale price at around US $2.3billion. However Ford will still contribute around US $600 million to the Jaguar Land Rover pension plans.

“Jaguar and Land Rover are terrific brands, we are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata’s stewardship. Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all.” said Alan Mulally, president and CEO, Ford Motor Company. “

Nevertheless, the link between Ford and its former subsidiaries will not be easily broken, Ford has agreed to supply Jaguar and Land Rover with powertrains, stampings and other vehicle components for a set period of time.

Alan Mulally

Ford will also supply environmental and platform technologies plus R&D, information technology, accounting and more.

“This is a good agreement. It provides the Jaguar Land Rover management team and employees with the assurances needed to maintain their focus on delivering the best results for the business, I am confident that, under its new owner, Jaguar Land Rover will continue to build upon the significant improvements and product successes it has achieved in recent years.” said Lewis Booth, executive vice president, Ford Motor Company, who has responsibility for Ford of Europe, Volvo and Jaguar Land Rover.

It will be interesting to see how these two brands will work when Ford no longer supplies the parts. The company’s credit division, Ford Motor Credit, has also agreed to continue financing for Jaguar and Land Rover dealers and customers for up to 12 months.

Tata Group Chairman Ratan TataNot all at Jaguar & Land Rover see this as a bad thing, many insiders believe that under Tata control, they will feel a sense of freedom to develop their own stand-alone capabilities.

Both Tata and Ford were quick to point out that there are currently no plans for significant changes to Jaguar Land Rover employees’ terms of employment on completion.

As for Tata? Mr. Ratan N. Tata, Chairman of Tata Sons and Tata Motors, said:

“We are very pleased at the prospect of Jaguar Land Rover being a significant part of our automotive business. We have enormous respect for the two brands and will endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact. We aim to support their growth, while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business.”

No matter how you look at it, the future of Jaguar and Land Rover is exciting. There is the prospect for enormous success, or massive failure, only time will tell.

Here is a brief historical overview of Tata’s milestones:

  • 1945 – Tata Engineering and Locomotive Co Ltd (TELCO) is set up as a locomotive maker at the end of World War Two
  • 1954 – Begins making trucks after forming a partnership with Germany’s Daimler-Benz
  • 1977 – Tata builds its first Commercial vehicles.
  • 1994 – Begins making Mercedes Benz cars in India
  • 1998 – Launches the Indica, the home made Indian car
  • 2001 – No more work done with Daimle
  • 2002 – Changes name from TELCO to Tata Motors Ltd
  • 2003 – Announces plan to build world’s cheapest car, the Tata Nano for 100,000 rupees ($2,500 USD)
  • 2004 – Buys up South Korea’s Daewoo Commercial Vehicle Co, and lists on the New York Stock Exchange.
  • 2005 – Attains a 21 percent share holding in Spanish bus maker Hispano Carrocera SA
  • 2006 – Begins work with fiat having signed a distribution agreement. Also enters into a venture with Brazilian bus maker Marcopolo
  • 2008 – Acquires Jaguar and Land Rover from Ford

What do you think the future holds for the British brands?




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