Frankfurt/ Mumbai: The head of a group that represents Jaguar car dealers in the US is warning Ford Motor Co. against selling its premium Jaguar brand to either of the two interested Indian bidders, because of what he called “unique image issues”.
Instead of selling to India’s Tata group or Mahindra & Mahindra Ltd (M&M), Ford should sell Jaguar to another final bidder, US-based JPMorgan Chase & Co. unit One Equity Partners, said Ken Gorin, chairman of the Jaguar Business Operations Council.
“I don’t believe the US public is ready for ownership out of India” of a luxury car brand such as Jaguar, Gorin said in an interview this week. “And I believe it would severely throw a tremendous cast of doubt over the viability of the brand.”
Gorin said he and his fellow US dealers also prefer One Equity Partners because the man leading One Equity’s pursuit of the brands is Jacques Nasser. Nasser championed high levels of investment in Ford’s European luxury brands when he was chief executive officer of the Dearborn, Michigan, auto maker from 1999 until 2001.
Gorin said he wasn’t judging the management capabilities of Tata or M&M. “My concern is perception (in the marketplace), and perception is reality,” he said.
“It’s about saying there are unique image issues with two of the bidders that the other one doesn’t have.”
He added that his concerns wouldn’t be relevant if the car brand being sold was mass market. “We’re a luxury brand... There are a number of subjective items that create the lustre of a brand,” Gorin said. “I don’t mean to be negative towards anyone. I don’t think we could have a Chinese-owned Jaguar” either.
A spokesman for Tata group declined to comment on Gorin’s remarks. Representatives for M&M couldn’t immediately be reached. A spokesman for Ford declined to comment. Last year, Jaguar derived 29% of its sales from North America. Gorin’s comments illustrate how groups with a stake in the future of Jaguar and Land Rover are choosing sides as Ford approaches a decision on selling them.
Last month, about 60 senior shop stewards representing workers at Jaguar and Land Rover voted in favour of a resolution supporting Tata Motors Ltd’s bid, should Ford choose to sell the brands.
The vote occurred a day after representatives of Tata Motors, M&M and One Equity met separately with British trade-union leaders. Union officials want assurances that a sale of the brands wouldn’t lead to job losses or factory closures.
While M&M has tended to specialize in tractors and off-road vehicles, the Tata group is a highly diversified conglomerate with experience in upscale businesses; its Indian Hotels division took over management of the landmark Pierre hotel in New York in 2005. The Tata group also owns former British stalwarts Tetley Tea and steel company Corus Group Plc., giving the company extensive links to UK business and political leaders.
Ford acquired Jaguar for $2.5 billion (Rs9,850 crore now) in 1989 and Land Rover for $2.75 billion in 2000. The company has put them up for sale as it seeks to refocus on its Ford brand and its North American business. Ford posted losses of $12.6 billion last year and has seen its revenue tumble this year.