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Jaguar's financial mire exposed
25 January 2007
The full extent of Jaguar’s perilous financial situation was revealed yesterday. The British car-maker is reported to have lost a massive $715m in 2006 according to an internal analysis document prepared for senior Ford executives, and leaked to American journalists. However, those losses are expected to decrease over the coming years, down to $550m in 2007 and $300m in '08.
Worse still, US analysts are predicting that Ford will post the biggest loss in its 103-year history for 2006. The final figure is expected to top the $7.39bn loss recorded in 1992.
Ford’s new CEO, ex-Boeing boss Alan Mulally, told reporters at the recent Detroit show that ‘Jaguar was not for sale at this time’. This was widely interpreted as meaning that Jaguar was going to get the chance to re-establish itself with the new XK coupe and convertible and the XF saloon.
Even so, the revelations about Jaguar’s position will make concerning reading for Ford's top men, and will send a chill through the West Midlands. Jaguar received a massive $1.2bn cash injection in late 2005 from parent company Ford, and is clearly far from a position where it could pay that money back.
With total production in 2006 down to just 75,000 cars, Jaguar’s survival prospects look more bleak now than they have in years. Although the replacement for the ageing S-type saloon is just 12 months away from the showroom, Jaguar’s sales in the all-important North American market are in freefall. From a high of 61,000 sales (half of which were X-types) in 2002, Jaguar hit 21,000 units last year, after sales of the core XJ, XK and S-type models halved, and X-type sales fell to just over 5000 units.
Hilton Holloway
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