BRUSSELS - Ford will get back some of the $2.5 billion it paid for Jaguar Cars Ltd. in 1989. The purchase may go down in history as the classic 'blue-sky purchase,' but the pay-off will start in 18 months when the X200 arrives to double Jaguar sales, said Nick Scheele, Jaguar chairman and chief executive.
The luxury carmaker is already paying for its own investment. Jaguar hopes the X200, sized to go against the BMW 5 series, will boost total annual sales from 40,000 now to over 90,000 in 1999.
Jaguar needed more than this new product to rescue it, said Scheele. He said the brand name alone kept sales going during the 1980s. But to revive itself Jaguar had to improve quality, reliability and resale value.
Since 1989, Jaguar has added state-of-the-art assembly facilities and launched replacements for the XJ sedan and XK8 coupe and convertible. He said Ford provides money and approves strategy, but leaves other decisions to Jaguar executives. Jaguar develops cars with Ford's US large car platform team, 'but we also have our own development center.'
Buyers no longer choose a Jaguar on emotional grounds alone, said Scheele, speaking at the Automotive News Europe Congress. 'Never before could customers defend a Jaguar on rational reasons. They can now.'
In the latest J.D. Power survey in the US, Jaguar ranked eighth for quality. In 1993, 'out of 36 nameplates, Jaguar was 35th. The last place car was the Yugo. 'We have a long way to go, but everyone is committed to becoming No. 1,' he said.
What comes after the X200, Scheele would not say. He ruled out a sport-utility. The carmaker had designed one but could not justify selling a 'rounded box' as a Jaguar.
As for a smaller car, Scheele said there are no immediate plans. He envisions Jaguar going down as far as the medium segments, but not as small as a Mercedes A class.
He said Jaguars have been built outside the UK in the past, and they could be again.
'BMW and Mercedes have shown that you can build outside your home base,' he said. 'Whether we will or not only time will tell.'