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- '97 Limited
The Land Rover sale is now final guys, here's the story.
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By JUSTIN HYDE
The Associated Press
5/24/00 6:19 PM
DEARBORN, Mich. (AP) -- Now that Ford Motor Co. has taken control of Land Rover, Ford CEO Jac Nasser says the British luxury truck maker will have to meet the environmental standards Ford has set out for its sport utility vehicles.
Otherwise, buyers of the expensive SUVs will see not see many changes for a few years, as Ford slowly kneads the Land Rover line into its Premier Automotive Group of luxury vehicles.
"It's a going business, and we'd like the opportunity to grow the business," Nasser said Wednesday.
Nasser's comments came after Ford finalized its deal to buy Land Rover from BMW AG for $2.7 billion. The deal was announced in March as part of BMW's push to shed its Britain-based Rover passenger car division and Land Rover.
Under the deal, Ford will take over the rights to the Land Rover brands, the Land Rover plant in Solihull, England, the research and development plant in Gaydon, England, the Land Rover dealer network, the British Motor Industry Heritage Center and 13,000 employees.
The first two-thirds of the $2.7 billion purchase price are to be paid immediately and the final third of the payment will be made by 2005, BMW said.
Land Rover sells four models of luxury SUVs, two of which -- the Range Rover and the Discovery -- are imported to the United States. The company built about 160,000 vehicles last year, generating between $5 billion and $6 billion in revenue.
Nasser said Ford would make Land Rover meet federal corporate average fuel economy standards so that its vehicles were not charged the "gas-guzzler" tax. One way to do that would be to import the Defender, an SUV that's smaller than the Discovery and gets better gas mileage, improving the overall fleet average.
Land Rover is not profitable, Nasser said, and will not be for the next two years. But the company expects Land Rover to generate "good profitability" in the third year, he said.
"Land Rover has been selling about 30,000 units in the American market. There's a huge potential for improvement there," Nasser said.
Nasser said Ford hadn't decided on any changes to Land Rover's British facilities. A quick review found "some very modern and very good design parts, and there are some parts that need work."
BMW will still earn some revenue from Land Rovers, which use an extensive number of BMW components and engines. Ford will pay BMW for work in progress; BMW, not Ford, will be responsible for the launch of the next generation Range Rover due out next year.
Land Rover was considered one of the jewels of the Rover group when BMW paid $1.2 billion for the company in 1994. Earlier this month, BMW sealed a deal to sell Rover cars to Britain's Phoenix consortium after investing $4.1 billion in a failed, six-year effort to restore the unit to profitability.
The Ford-Land Rover deal caps a two-year period of mergers, acquisitions and alliances in the auto industry that consolidated power among a global Big Six: General Motors Corp., Ford, DaimlerChrysler AG, Toyota Motor Co., Volkswagen AG and Renault.
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Stephen Withrow
StephenLS400@aol.com
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97 Explorer Limited 4X4 SOHC V6
98 Lexus LS400
[This message has been edited by Stephen (edited 05-24-2000).]
-------
By JUSTIN HYDE
The Associated Press
5/24/00 6:19 PM
DEARBORN, Mich. (AP) -- Now that Ford Motor Co. has taken control of Land Rover, Ford CEO Jac Nasser says the British luxury truck maker will have to meet the environmental standards Ford has set out for its sport utility vehicles.
Otherwise, buyers of the expensive SUVs will see not see many changes for a few years, as Ford slowly kneads the Land Rover line into its Premier Automotive Group of luxury vehicles.
"It's a going business, and we'd like the opportunity to grow the business," Nasser said Wednesday.
Nasser's comments came after Ford finalized its deal to buy Land Rover from BMW AG for $2.7 billion. The deal was announced in March as part of BMW's push to shed its Britain-based Rover passenger car division and Land Rover.
Under the deal, Ford will take over the rights to the Land Rover brands, the Land Rover plant in Solihull, England, the research and development plant in Gaydon, England, the Land Rover dealer network, the British Motor Industry Heritage Center and 13,000 employees.
The first two-thirds of the $2.7 billion purchase price are to be paid immediately and the final third of the payment will be made by 2005, BMW said.
Land Rover sells four models of luxury SUVs, two of which -- the Range Rover and the Discovery -- are imported to the United States. The company built about 160,000 vehicles last year, generating between $5 billion and $6 billion in revenue.
Nasser said Ford would make Land Rover meet federal corporate average fuel economy standards so that its vehicles were not charged the "gas-guzzler" tax. One way to do that would be to import the Defender, an SUV that's smaller than the Discovery and gets better gas mileage, improving the overall fleet average.
Land Rover is not profitable, Nasser said, and will not be for the next two years. But the company expects Land Rover to generate "good profitability" in the third year, he said.
"Land Rover has been selling about 30,000 units in the American market. There's a huge potential for improvement there," Nasser said.
Nasser said Ford hadn't decided on any changes to Land Rover's British facilities. A quick review found "some very modern and very good design parts, and there are some parts that need work."
BMW will still earn some revenue from Land Rovers, which use an extensive number of BMW components and engines. Ford will pay BMW for work in progress; BMW, not Ford, will be responsible for the launch of the next generation Range Rover due out next year.
Land Rover was considered one of the jewels of the Rover group when BMW paid $1.2 billion for the company in 1994. Earlier this month, BMW sealed a deal to sell Rover cars to Britain's Phoenix consortium after investing $4.1 billion in a failed, six-year effort to restore the unit to profitability.
The Ford-Land Rover deal caps a two-year period of mergers, acquisitions and alliances in the auto industry that consolidated power among a global Big Six: General Motors Corp., Ford, DaimlerChrysler AG, Toyota Motor Co., Volkswagen AG and Renault.
------------------
Stephen Withrow
StephenLS400@aol.com
------------------
97 Explorer Limited 4X4 SOHC V6
98 Lexus LS400
[This message has been edited by Stephen (edited 05-24-2000).]
