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On June 2, 2008, the Ford Motor Company (Ford), the world's third largest automaker, announced that it had completed the sale of Jaguar and Land Rover to Tata Motors.1
Ford, based in Dearborn, Michigan,2 was founded in 1903 by Henry Ford along with eleven business associates. Henry Ford became president of the company in 1906. The company soon grew to become one of the most successful automotive companies in the United States (US). It started expanding into overseas markets in the 1960s.
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In 1967, the company established Ford of Europe, integrating all its European operations under a single company. In 1970s, with the increase in popularity of small cars, Ford entered the mini car market.
Ford acquired Jaguar Cars Limited (Jaguar), a UK-based luxury car manufacturer, for US$ 2.5 billion in 1989. This acquisition was an attempt by Ford to break into the luxury market, which was dominated at the time by German automakers. However, in the 1990s, adverse economic conditions worldwide led to a fall in the demand for luxury cars, and this affected Jaguar's sales. Jaguar incurred losses throughout the decade.
In March 1999, Jaguar was brought under the Premier Automotive Group (PAG), a group that Ford created to differentiate its luxury marques from its mass-market brands. The other marques in the PAG included Lincoln3, Aston Martin4, and Volvo.5 In 2000, Ford bought Land Rover6 for US$ 2.75 billion from BMW.7 This was also brought under the PAG.
Ford made efforts to integrate the operations of Jaguar, Volvo, and Land Rover. It constituted a single engineering team, and shared technologies and powertrains between the brands. Most of the back office functions like purchase, HR, and finance were also integrated. In many countries, the marques also had a common sales and distribution network.
In 1998 Jaguar introduced a new model, the S-type, reviving one of its earlier model names from the 1960s. In 2001, it introduced the X-Type, another new model. However, these did not make much of an impression on the consumers, and sales were lackluster.
As a result, Jaguar continued to make losses. In 2004, after Jaguar recorded losses of US$ 426 million, Ford decided to shut down one of the three plants manufacturing Jaguar cars. The closure of the Browns Lane, Coventry plant led to the loss of around 450 manufacturing jobs.
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1] Tata Motors was established in 1945. In 2007-08, it was India's largest automobile company in terms of revenue.
2] Dearborn is the tenth largest city in the US state of Michigan according to the 2000 census.
3] Lincoln Motor Company was founded in 1917. It was acquired by Ford in 1922. The Lincoln brand was part of the Premier Automotive Group from 1999 to 2002.
4] Aston Martin Lagonda Limited (Aston Martin) was a UK-based luxury car manufacturing company acquired by Ford in 1991. From 1999, Aston Martin was part of the Premier Automotive Group.
5] Volvo Cars was a Swedish automobile company acquired by Ford in 1999.
6] Land Rover is a UK-based Multi Purpose Vehicle (MPV) manufacturer.
7] BMW, a German automobile manufacturer, was founded in 1913. In 1994, it bought the British Rover group consisting of the Rover, Land Rover, and MG marques. In 2000, BMW sold the Rover and MG marques to the Phoenix Consortium and Land Rover to Ford. |
