Ford Puts Up More Money to Aid Jaguar

The Ford Motor Company has invested £1.2 billion ($2.1 billion) in its unprofitable Jaguar unit to help pay for a reorganization at the luxury-car division.

A Jaguar spokesman, Don Hume, said yesterday that Ford provided the money by buying preferred shares in the unit. He declined to say how the investment would be used. The amount almost matches the $2.5 billion that Ford paid for Jaguar in 1989.

Jaguar, based in Coventry, England, posted a pretax loss of £430 million last year, and Mr. Hume said that business conditions at Jaguar have worsened in 2005.

Jaguar ended manufacturing at a British plant last year, laid off 1,150 workers and scrapped a plan to build 200,000 vehicles. Ford, which in the third quarter reported its first net loss in almost two years, does not have a target date for Jaguar to break even.

"Ford needs Jaguar as a global luxury brand," said Jim Hall, an analyst at the consulting firm AutoPacific in Southfield, Mich. "Volvo really isn't it," he said, referring to the automaker's Sweden-based unit that focuses its marketing on safety features.

Jaguar, which made 126,000 cars in 2003, expects to build 85,000 this year and may cut production to 80,000 next year, according to CSM Worldwide, a Detroit-based market researcher.

Ford is also preparing a North American cost-reduction plan including plant closings, amid declining sales of sport utility vehicles in the United States.

Ford has dropped a target for its Premier Automotive Group of luxury European car brands to contribute a third of automotive profit by 2006. Premier includes Jaguar, Land Rover, Aston Martin and Volvo.

The recapitalization at Jaguar was approved by Ford at the end of 2004 and put in place this month, Mr. Hume said. Jaguar this week started production of the aluminum-body XK car, which will go on sale in March.

Jaguar sales in the United States, the brand's largest market, fell 34 percent through November from a year earlier. Sales of the $30,000 X-Type, once promised to be the driver of expanding sales, declined 49 percent in the same period.

BEST OF THE SUPERCARS

Ferma, the official distributor of Ferrari in Thailand, has done a wonderful job compared to its previous management. Putting things into perspective, sales grew by a whopping 100% thanks to bookings of 29 units of the 22.5 million baht F430.

Hence, Ferma president Pongnarin Methivacharanondh is unanimously voted into the elite group.

Add in the facts that crude is soaring to record prices per barrel and the economy is a tad slow, it's a wonder that the Italian exotica is still selling.

Creative marketing, intelligent client networking and an eye for the right product has rejuvenated the Ferrari market in Thailand.

The local Ferrari club has also drummed up interest among enthusiasts.

BEST BRAND REJUVENATION

Mazda Sales Thailand managing director Fumio Tone gets the vote because of what the Mazda 3 compact has been doing since its debut: it's sold to the point where demand is outstripping supply.

Although the Mazda of yore under the previous distributorship boasted annual sales of 25,000 units per year thanks to the familiar presence of the Familia compact pickup, the new sporty image and fresh product line it has made available to buyers is an encouraging market sign.

The Mazda 3 is instrumental in Mazda attaining a 449% growth rate over last year which is why Mazda is in sixth place in the passenger car segment.

The 3 comes in 2.0-litre saloon and hatchback form and a 1.6-litre hatchback under one million baht.

Vehicle sales peak

Last year's forecast was slated at 630,000 units, but amassed only 626,024 units. However, analysts and pundits alike are going for 690,000 units this year. The stimulants for growth are pickups, pickup-based SUVs and small passenger cars.

The premium passenger car segment contracted a bit owing to higher oil prices and customers shying away from gas-guzzlers.

The Toyota Fortuner SUV based on the Hilux Vigo pickup allowed the brand to create an unprecedented phenomenon with 80% market share of the SUV segment and possibly 40,000 units for the whole year.

All in all, the 625,556 units sold from January to November represents a continuous growth trend since the economic downtrend in 1997.

Alternative fuel

Alternative fuels have assumed prominence because of soaring oil prices and the sudden realisation that fossil fuels may only last for another 40 years or so.

Fuel cell technology might be too early for now, while the hybrid engine is still a tad too expensive to become a mass-market product in Thailand.

Gasohol seems to be the appropriate alternative fuel for the time being. Gasohol, or E10, is gasoline mixed with ethanol making it cheaper than premium 95 by 1.50 baht.

However, local ethanol production cannot meet demand which is why it has to be imported. The failure to convince motorists about E10 is why Ford suffered as the government deferred is decision to lower excise tax from 30% to 20% for E10-capable engines.

Natural gas vehicle (NGV) technology is also being promoted as an alternative fuel, while bio-diesel also made the headlines for a while.

More world premieres in Thailand

Thailand has become the production base for one-ton pickups which is why there were two world premieres: the Mitsubishi Triton in 3.2- and 2.5-litre common-rail diesel forms and most recently, the Ford 4-Trac concept pointing to the new Ranger due next year.

Thailand is expected to host world debuts of the Ranger and Mazda Fighter in production forms at the Bangkok Motor Show next March.

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