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Ford not to unveil Land Rover in India

Ford Motor Co or FMC of the United States has decided against introducing its recently-acquired marquee Land Rover in India, a senior company official said.

"The Ford-Land Rover deal is unlikely to result in the launch of the Land Rover sports utility vehicle or SUV range in India. Land Rover will add to the existing range of luxury vehicles in Ford's stables and would surely add on to Ford's global market-share," B S Rathore, vice-president of external affairs at Ford India Limited, an FMC subsidiary, said.

Land Rover, he said, is positioned in the top-end segment of the SUV range and is recognised as a premium brand. "But India is a very price sensitive market and it would not make much sense introducing this premium brand here," he added.

The Land Rover would join the likes of Lincoln Mercury, Aston Martin and Jaguar in Ford's portfolio.

Ford Motor Co has already announced that it expects the purchase of Land Rover to significantly expand its sales volumes for its premier automotive group or PAG, although profitability for the unit is a few years down the road.

PAG chief financial officer Bill Cosgrove had told analysts that he felt getting the unit's plant in Solihull, England, up to full production capabilities and improving quality, distribution and efficiency issues would turn the operation around.

He had added that the ability to leverage economies of scale, while not eliminating the uniqueness of the Land Rover brand will be a vital component in turning things to the black.

"We are very sensitive to the unique image and profile and pure off-road character that Land Rover has. Having said that, there are a lot of components in these vehicles that I would describe as commodity-type components that have no impact the brand image."

Cosgrove had further said, Ford would like to improve the sales figures for Land Rover in the United States. Exploiting the company's distribution capabilities will help with some of that.

Finding ways to partner with Jaguar, another British luxury marquee, will prove to be a pivotal component of that strategy. With 1,800 dealers world-wide, Cosgrove feels there's a strong foundation.

Ford will also look at opportunities to bring more Land Rovers to America, particularly the entry-level truck, the Freelander, which is not sold in the US.

It may be recalled that German carmaker BMW has already announced plans to sell off the Land Rover unit of its troubled UK subsidiary Rover to Ford for 3 billion euros. BMW plans to sell Land Rover to Ford within 2 to 3 months, adding that the unit made losses in the 1999 financial year.

BMW decided to sell Rover because the additional costs at the UK subsidiary resulting from sterling's high level could not be compensated for by productivity gains.

Furthermore, a relaunch of the Rover brand had failed to achieve the sales targets BMW had set. In light of the 25 per cent drop in Rover sales in 1999, plus the alleged lack of UK government clarity over whether or not to join the Euro-zone, shedding Rover was an economic necessity.

Ford's purchase of Land Rover gives the world's second-largest auto-maker the luxury sport-utility vehicle it needs to round out its PAG line-up, and it was done at the right price.

Overall, the acquisition is for the entire Land Rover line: Range Rover, Discovery, Freelander and Defender, as well as the assembly and engineering facilities. Additionally, there is no assumption of debt by Ford, which makes the deal that much sweeter.

Land Rover is expected to sell approximately 200,000 units this year. This will be added to the 500,000 units the rest of the PAG will sell in 2000. PAG includes Lincoln, Volvo, Mercury, Jaguar and Aston Martin.

UNI

Business