Ford's 2007 results should cheer Tata

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By Sumantra Barooah, CNBC-TV18

 

India's Tata Motors would be happy with American car major Ford 's financial results in 2007.  That would be not so much because Ford managed to trim its losses by a whopping USD 9.9 billion, but the half a billion dollar profit posted by its premier automotive group, which includes Jaguar and Land Rover, reports CNBC-TV18.

 

Tata Motors has reasons to cheer! Jaguar and Land Rover are becoming healthier as they get ready to come under the Tata fold.

 

Ford's significant reduction in losses from USD 12.6 billion to USD 2.7 billion, during 2007, was aided by the USD 504 million profit posted by the premier automotive group-represented by the trio of Jaguar, Land Rover and Volvo cars. The group had a loss of USD 344 million last year. The turnaround was driven primarily by Land Rover, the only profitable member of the trio. But Jaguar also contributed by cutting its losses by more than half.

 

Ford does not share independent figures for these units. But reports said losses at Jaguar stood at USD 715 million in 2006. Jaguar is also believed to be closer to a breakeven, if not posting an absolute profit by the end of 2008.

 

Jaguar's sales fell 19% to a little below 60,500 units in 2007. But Ford says that is mainly due to the phasing out of the S-type, which the company stopped selling from September, and the slowdown in the US, where it sells around a third of its total volume. But it managed to post record sales in markets like China and Russia.

 

The strong boy Land Rover's profit, on the other hand, was driven by the record sale of 2.26 lakh vehicles, an 18% YoY growth in 2007. Volvo has also posted record sales with 4,58,000 cars but could not make any profit. Call it efficient comeback plan by Ford or the successful efforts by JLR engineers, the performance may make the prospective new owner of Jaguar-Land Rover smile.