Jaguar + Land Rover = Credit Kryptonite

Given how Ford has struggled with Jaguar, it's no surprise that Moody's says it may cut the ratings of Tata Motors if it buys Ford's Jaguar and Land Rover units, saying the acquisition could create "substantial" challenges for the Indian company. Yah think?

Of course the premium brands could afford Tata Motor's instant credibility in the global marketplace, but at what cost? Some American dealers are recoiling at the idea of Indian ownership and let's face it Ford isn't selling Jaguar due to its fabulous sales performance. Jaguar is at a crossroads. The new XF could be a real triumph for the brand. I'm not all that smitten by the car personally, but the strength of its initial order bank does bode well.

The British brands are being sold for a pennies on the dollar. "Ford paid five to seven billion dollars for the companies depending on how you do the conversion and adjusted for inflation. And it has pumped in 10 billion dollars more in trying to turn the brands around," said Chirag Shah, analyst at Mumbai's Emkay Securities. Tata's bid of around 1.5 to 2.0 billion dollars would certain represent a tremendous bargain.

If Tata does end up signing the papers, it is likely that it would be "steady as she goes" for awhile while Tata finds its way. A Times Online story states that Tata would likely name a top Ford executive in Europe as chief executive of the Jaguar-Land Rover group.



sources: afp, afp, times online