Tim Pollard mulls over the speculation surrounding the sale of Jaguar and Land Rover
These are exciting times in the car industry. The building blocks of the mega-mergers of the late twentieth and early twenty-first centuries are coming tumbling down around our heads. We are witnessing motor history being made, in every newspaper cutting we read and rumour we hear.
It was only a decade ago that the industry consolidated, led by an acquisitive Volkswagen, Ford and GM. Huge conglomerates were built up, as manufacturers raced to the holy grail of economies of scale and leveraging supplier efficiencies. Horrible management-speak, but the manufacturing mantra was: big is beautiful. Now, the big car groups are rapidly consolidating and shrinking before our eyes.
If, like me, you’re following the situation at Ford with interest, you’ll be fascinated by the sheer breadth of names linked with the possible sale of Jaguar, Land Rover and Volvo. One minute the Koreans are interested, the next Renault-Nissan are mentioned. The latest story, surfacing today in London’s Daily Telegraph, names India’s Tata as a bidder for Ford’s two premium brands.
Coming hot on the heels of Ford’s Aston Martin sale, to a Middle Eastern consortium led by Prodrive boss David Richards, and Mercedes-Benz’s end to its relationship with Chrsyler, it can be hard to keep up with the changing shape of the industry. Is there a pattern developing? Private equity firms are flush with cash looking for a quick buck. But news that eastern brands are preparing bids intrigues me.
Tata is a brand on a roll, expanding massively in a booming Indian market. It is already used to cooperating with other manufacturers, but has little overlap with Jaguar and Land Rover to produce any synergies crucial for long-term success. If they do table a bid, it will epitomise how much the industrial world has changed in these post-Imperial times.
This week (19 July) marks the deadline for interested parties to table an interest. My man close to the deal suggests that we shouldn’t expect any news for some time, though. Expressions of interest will be tabled this week, but it will take many months for the bean counters to sift through the paperwork. My best guess is a deal to be announced later this autumn.
Who will buy? At this stage, I’m reluctant to make a call. Suffice to say there’ll be plenty more speculation along the way…