Ford plans to sell Jaguar and Land Rover, its two British luxury brands, in an apparent step back from premium carmaking.
Ford has asked Goldman Sachs, Morgan Stanley and HSBC to advise on the sale, which is said to be in the early stages and does not include Volvo, the third luxury brand in its Premier Automotive Group.
Ford is understood to be selling the two brands jointly.
Jaguar and Land Rover's vehicles do not share common architecture but the brands share purchasing and some other functions. Land Rover's Freelander 2 is made in the same facility in Halewood, England, as Jaguar's X-type range. They also share headquarters and product engineering at Gaydon and a design and development centre at Whitley near Coventry. In March Ford sold control of Aston Martin, the sports car marque, to a Kuwaiti-led consortium in a €706 million deal that included its own retained minority stake.
The company declined to comment yesterday on what it called "speculation".
Analysts were uncertain of how much Ford may get for the brands, whose earnings it consolidates with those of Volvo and Aston Martin. Ford's premium PAG group reported a pre-tax loss last year of $327 million.
Industry sources suggest that Land Rover is the more attractive option. "There is general interest worldwide in Land Rover but less so for Jaguar," said one industry insider. Land Rover, which sold a record 192,500 vehicles in 2006, is said to be profitable, but Jaguar, which is refreshing its line-up in an effort to regain market share, is losing money.
"It may be 'buy one, get one free'," said a person familiar with the two brands.
The sale is likely to draw interest from buy-out groups following last month's $7.4 billion sale of lossmaking US carmaker Chrysler to private equity group Cerberus. Analysts said that many established carmakers would balk at taking on the two brands, whose large, powerful vehicles are costly to develop at a time of rising curbs on car emissions. Fiat Auto and Renault yesterday denied any interest in them.
Private equity group Alchemy played down a report that it was planning a €4.4 billion offer. Alchemy said that its managing partner, Jon Moulton, had said that he was interested "but only at an emotional level".
News of the sale followed months of denials by Ford that it was looking to offload the two brands, and its timing surprised some observers. "They may be saying, 'It's time to get back to what we know: volume car production,'" said Eric Wallbank, an automotive specialist with Ernst and Young in London.
- Financial Times/Guardian Service