Jaguar back in the black
Overseas sales save the day for the much troubled luxury car makers
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Your support makes all the difference.Jaguar, which has run up losses of almost £1bn since Ford bought it in 1989, is back in the black thanks to strong overseas sales. Details are due to be announced tomorrow, when Ford also unveils a improvement in its European operations. Alex Trotman, Ford chairman, said at the World Economic Forum in Davos yesterday: "Jaguar turned the corner in the fourth quarter. We went into the black for the first quarter since we acquired the Jaguar company, and I am very pleased about that to say the least. It has been quite a journey."
Jaguarbought by Ford in 1990 for £1.6bn, is estimated to have lost £580m in 1992 and £240m in 1993. Its losses were £99m for the first three quarters of 1994.
Mr Trotman said: "Sales are up, the '95 model of the Jaguar came out and has been very well received, and sales are strongly increased over the prior year, so things are looking better for the Jaguar company."
Jaguar's worldwide sales rose ten per cent to 30,000 cars last year, 78 per cent of which were in export markets. In Jaguar's biggest market, the United States, sales rose 20 per cent to 15,000 vehicles.
The importance of the American market has lead some analysts to believe that Ford must eventually start building Jaguar's in the US.
Ford is threatening to build a new range of Jaguar cars in America unless it receives a UK Government grant of up to £100m towards producing them at its Midlands plants.
Ford Europe had also made a profit after years in the red, Mr Trotman said. Excluding Jaguar, Ford Europe lost $407m (£271m) in 1992 and $647m in 1993. "It is a turnaround from three years of losses," he said. "We had a decent year - I wouldn't call it agreat year - from a profit standpoint in Europe." Ford's worldwide operation reported a record third-quarter profit of $1.1bn. Its first-half earnings for 1994 were $2.6bn.
For the current year, Mr Trotman forecast that Ford's share of the US car market would be "flat to slightly up".
Mr Trotman said that the peso crisis would have a "substantial" negative effect on Ford's large Mexico business. "The net news does not look good," he said.
Ford ships a large number of vehicles and components to Mexico from plants in the US and Canada and a reciprocal flow of about 25,000 vehicles annually are shipped from the plants in Mexico to North America.
"Obviously, vehicles coming from Canada and the US are incredibly high in cost, in peso terms, so I expect our volume will drop dramatically of the vehicles going south," Mr Trotman said.
He expected Mexico's automobile industry to shrink quite substantially once the country stabilised.
Ford's share of the American market dipped about 0.2 per cent last year due to capacity problems.
However, Mr Trotman stressed that he could see no reason why the general improvement in the market could not be sustained for several more years.
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