An Indian buyer offers a brighter and more secure future for Land Rover and Jaguar than an American private equity firm, industry experts told Parliament yesterday.
MPs heard the marque's prospects were "unclear" if snapped up by private equity bidder One Equity. But a sub-continent buyer - tipped to be Tata Motors - was likely to keep them in the UK and invest.
The claims were made by Peter Cooke, professor of automotive management at Buckingham University, and Eric Wallbank, of accountants Ernst and Young.
They were giving evidence to the Commons Business, Enterprise and Regulatory Reform Committee, chaired by Mid Worcestershire MP Peter Luff (Con), following Ford's decision to sell the brands.
Indian automobile firms Tata Motors and Mahindra and Mahindra are reported to be close to submitting revised bids for the businesses which employ 15,000, mainly in Solihull and Castle Bromwich, Birmingham. One Equity is the private equity arm of JP Morgan. Professor Cooke told MPs: "I suspect if Tata were to acquire it, they would keep the company in the UK and look to develop it."
India was a fast-growing economy where people were very brand conscious, which created a "very real opportunity" for Jaguar, he said.
Mr Wallbank said both potential Indian buyers had "strong vehicle manufacturing bases", which they would try to link up with Jaguar and Land Rover.
But commenting on a private equity buyout, he warned: "It is unclear to me what the business model is that would enable this to work for them, as an investor."
Both experts agreed Jaguar could have a bright future under the right owner, despite years of unprofitability. Mr Wallbank said: "Ford can't afford to invest, but a new owner might have access to capital to enable them to develop the product range."
Prof Cooke said Jaguar was right to pursue a strategy of making increasingly expensive cars for a "very elite sector".
He told MPs: "We are talking about people who buy two or three cars, because they don't necessarily live in one country."
The committee is expected to take evidence from Ford next year, but agreed not to do so until the sale was complete because of commercial sensitivities. Speaking in a separate Commons hearing, Mr Luff said jobs at Jaguar and Land Rover could be safer under new ownership. He said: "If I were an employee of Ford, Land Rover or Jaguar, I would rather be owned by a company with money to invest than a company that was losing billions."
Solihull MP Lorely Burt added: "I understand Ford is selling the classic marques of Land Rover and Jaguar because elsewhere in the world it is not necessarily so successful.
"The company is £6 billion in debt. The company does not want those marques to be lost, it wants them to continue, but... with the greater investment needed to meet the challenges of the global market."
Ford bought Jaguar in 1989 for £1.6 billion and paid £1.7 billion for Land Rover in 2000.
However, its Premier Automotive Group, which includes the two brands, lost £166 million last year.
Previous stories on the Ford sale of Jaguar and Land Rover >
