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AU:Jaguar's pain: throwing cash away would cost less

Jaguar's pain: throwing cash away would cost less

The Australian
Robert Wilson

JAGUAR has lost so much money in the past 15 years it would have been better off giving cash away than trying to sell cars.

Industry analyst and author Graeme Maxton says if the company gave every buyer who walked into its showrooms $US6000 ($7900) to walk out again it would still have lost less money than it has torn up in 15 years of ownership by Ford.

The company's losses and the inflated price Ford paid for Jaguar in 1989 amount to $US6billion -- or over $US6000 for every car it sold in that time -- said Mr Maxton, a partner in British-based industry strategic con******ts Autopolis.

"Ford bought Jaguar almost 15 years ago for around $US3billion, at current exchange rates. Since then, although Ford has poured billions more into the business, it has made not a cent in return."

As well as launching its latest Advanced Lightweight Coupe concept car at this year's Detroit Motor Show, the British luxury car maker announced a loss of pound stg. 601.1 million ($1.48 billion) in 2003. And with US sales falling 16.4 per cent last year, a loss of hundreds of millions of dollars for 2004 has been anticipated by chief executive Joe Greenwell.

But Mr Maxton, co-author with John Wormald of Time for a Model Change, a study of the industry, says he is not singling out Jaguar or Ford.

"Mitsubishi is disintegrating. GM, the biggest name in the business, can barely keep its head above water, mostly making money out of its financing arms or selling mortgages.

"Europe's largest car maker, Volkswagen, is in trouble too. The same is true for much of the parts business, with hundreds of America's component manufacturers struggling to survive."

Lack of growth, too many factories, poor quality, too many models, poor management and refusal to make changes, have forced these companies into a corner, say Mr Maxton and Mr Wormald.

"The combined market value of all the troubled car companies in the world is not even half that of the leading firm, Toyota," Mr Maxton said.

The car industry, despite accounting for 11 per cent of GDP in developed countries, represents less than 2 per cent of global stock market capitalisation.

My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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