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      09-19-2019, 12:31 AM   #1
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Would BMW Benefit From Purchasing Jaguar Land Rover? Some Analysts Think So

Would BMW Benefit From Purchasing Jaguar Land Rover? These analysts think so.


https://www.bloomberg.com/news/artic...bernstein-says

Cash-Rich BMW Should Buy ‘Severely Challenged’ Jaguar: Bernstein

September 18, 2019

NEW DELHI -- We need to talk about Jaguar Land Rover.

That's the message from Sanford C. Bernstein analysts, who say BMW should buy the British luxury brand from India's Tata Motors.

"BMW is overcapitalized and awash with cash. It has run into the limits of growth for its product range and brand," analysts including Max Warburton wrote in a research note Wednesday.

"JLR is severely challenged, both operationally and financially, but could massively lower both its fixed and variable costs under the wing of a bigger partner."

The suggestion comes as Tata Motors' losses mount, with a sales slowdown in China and Brexit adding to its woes.

BMW is also navigating trade tensions between the U.S. and China that have weighed on profit, and the unresolved political future of the UK, where it makes Mini and Rolls-Royce cars.

Buying JLR for 9 billion pounds ($11.2 billion) could add 20 percent to BMW's earnings, according to Bernstein. It would also contribute almost a quarter to BMW's volumes, but "Tata would need to swallow its pride to sell," the analysts said. They also said the German automaker would have to be less conservative.

A deal would be "emotionally complex" due to their former relationship, when BMW owned Land Rover and the wider Rover group in the 1990s, Warburton and his colleagues wrote.

"It was a traumatic period for the Bavarian company and there are executives in Munich who are still emotionally scarred by the experience."

Still, the logic for an acquisition is compelling, they said.

BMW is working through a $14 billion savings plan and JLR is undergoing a 2.5 billion-pound savings program and cutting 4,500 jobs. The two already agreed to collaborate on their next generation of electric cars earlier this year.

BMW has previously ruled out equity ties with the unit of Tata Motors.

A representative for BMW in India said Wednesday that the company does not comment on speculation, while Tata Motors did not immediately respond to an email seeking comments.

Tata Group bought JLR from Ford in 2008 for $2.3 billion. The Indian salt-to-software conglomerate has been exploring strategic options for JLR, including a potential stake sale, people familiar with the matter have said. Tata Group has denied that.
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      09-19-2019, 06:57 AM   #2
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Land Rover has very high brand value, so that would at least appear to have the potential for high return on investment. Although there is marginal overlap with BMWs SAV lineup, Land Rover obviously has a much stronger reputation in off-road/overland circles, and covers segments that BMW does not (and probably could not effectively without creating another brand anyway). With the right product/feature mix and infusion of technology from BMW i, Land Rover could become a strong competitor next decade, especially with companies like Rivian and Bolinger priming different corners of the soon-to-explode off road electric vehicle market.

Jaguar, on the other hand, would seem to be little more than excess baggage. With due respect to what was once an iconic brand, it might be best for whoever becomes steward of JLR in the future to put this nameplate into deep sleep.
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      09-19-2019, 10:13 AM   #3
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This will be the most strategic acquisition for BMW. Imagine the Range Rover Line up with the BMW platform and drivetrain, B58 and N63 engines?

It would make RR perfect.
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      09-19-2019, 10:15 AM   #4
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I'd say BMW could benefit from doing this as long as, in the process, they kill off Jaguar and just keep Land Rover. Then the next order of business would be for BMW to apply their reliability criteria to Land Rover to get Rover's reliability rankings up in the top 10. If that happened, along with BMW-like warranty and service, Land Rover would become a top selling vehicle. I've considered a full-size Range supercharged many times only to back out because of reliability and quality control issues. I am sure I am not the only one doing this.
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      09-19-2019, 10:18 AM   #5
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As hinted to in Post #1, I was surprised when BMW sold Land Rover to Tata some 20 years ago wondering if it was an effort to tank the brand for their own benefit.
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      09-19-2019, 10:23 AM   #6
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Quote:
Originally Posted by Alpine300zhp View Post
I'd say BMW could benefit from doing this as long as, in the process, they kill off Jaguar and just keep Land Rover. Then the next order of business would be for BMW to apply their reliability criteria to Land Rover to get Rover's reliability rankings up in the top 10. If that happened, along with BMW-like warranty and service, Land Rover would become a top selling vehicle. I've considered a full-size Range supercharged many times only to back out because of reliability and quality control issues. I am sure I am not the only one doing this.
I think killing off Jaguar is a bit over the top. They can share gas/hybrid/electric platforms and make solid offerings that customers who like the Jaguar brand can continue to buy.
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      09-19-2019, 10:26 AM   #7
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Quote:
Originally Posted by ///M TOWN View Post
I think killing off Jaguar is a bit over the top. They can share gas/hybrid/electric platforms and make solid offerings that customers who like the Jaguar brand can continue to buy.
Perhaps you are right. I'm reading Jaguar's problems to be so sufficient that killing off the brand and focusing on making Land Rover a world-class brand would bring BMW the most profits. Also, if BMW made Land Rover very reliable, fixed the issues with the brand and fixed the technological deficiencies in the trucks, they could easily charge another 10-20k for the full size Range and people would pay it.
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      09-19-2019, 10:29 AM   #8
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Buy out only Land Rover brand.
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      09-19-2019, 10:30 AM   #9
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Fck No! Been there, done that.

Tata is desperate to offload those moneypit brands. They (Tata) probably paid the author to use some serious financial contortions in order to make it look good for BMW.

The luxury market is crowded, time to cull the herd.
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      09-19-2019, 10:31 AM   #10
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I suspect part of why BMW is cash rich is because they keep figuring out ways to cut costs and charge more. I was upset that the ZF8 replaces the DCT in all of the new BMW's, but after having my ZF8 equipped X6M for 4 months, I have to admit that it is an excellent box and is programmed to feel very much like the DCT that was in my F80 and F82.
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      09-19-2019, 10:34 AM   #11
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Quote:
Originally Posted by Penguino View Post
This will be the most strategic acquisition for BMW. Imagine the Range Rover Line up with the BMW platform and drivetrain, B58 and N63 engines?

It would make RR perfect.
I am sorry but the wife had x5's (e53 and 3 e70's all V8's) and did not really like the F15 so she moved over to the RR sport Supercharged. She likes the RR better than the X5. Personally I think the SC v8 in the RR is better than the BMW TTv8.

As for electronics, Land Rover would GREATLY BENEFIT from a merger with BMW. LR tech is basically Ford's interpretation of the Sync system on top of what LR had and is shit. Not to mention all the stupid features which LR implements in there own way which is super frustrating. The adopted some ford ideas like cutting all power once a car door is opened so you can't shut a window once the car is shut off and a door is opened. Or the stupid fact you cannot lock the car if anything is opened. So if you lock the door before your kid shuts the door it won't lock. The list just grows form this
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      09-19-2019, 10:35 AM   #12
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Quote:
Originally Posted by MRV99 View Post
I am sorry but the wife had x5's (e53 and 3 e70's all V8's) and did not really like the F15 so she moved over to the RR sport Supercharged. She likes the RR better than the X5. Personally I think the SC v8 in the RR is better than the BMW TTv8.

As for electronics, Land Rover would GREATLY BENEFIT from a merger with BMW. LR tech is basically Ford's interpretation of the Sync system on top of what LR had and is shit. Not to mention all the stupid features which LR implements in there own way which is super frustrating. The adopted some ford ideas like cutting all power once a car door is opened so you can't shut a window once the car is shut off and a door is opened. Or the stupid fact you cannot lock the car if anything is opened. So if you lock the door before your kid shuts the door it won't lock. The list just grows form this
Yep, yep, yep.....
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      09-19-2019, 10:57 AM   #13
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BMW needs to take that money and use it for R&D to reduce plastic in their cars and or at least use Japanese plastic that lasts more than 5 years. They need to hire people from Denso to show them how to build a GD radiator, expansion tank, injectors, fuel pumps etc. They need to hire the best trim builders or at least buy a company that can show them how to build cars that last and are reliable. None of these companies will improve their reliability. They have already sold their souls to chase everyone down the suv path. If anything, maybe they can buy Porsche who can show them the proper placement of a nav screen in a sports car. Maybe they can also buy a car company like Toyota that can show them how to make cars that don't spin bearings and finally they can buy Audi to show them how to make good looking cars again.

So no, they shouldn't buy another company that doesn't bring something they need to the table.

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      09-19-2019, 10:59 AM   #14
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The fact that Land Rover/ Range Rover isn't making an absurd amount of money right now in the age of crossovers and SUVs boggles the mind.

The trucks may have some value to BMW. Jaguar might have some overlap, but perhaps with a bit of re-strategizing it could work. Keep the Jaguar portfolio small, and focus a bit more on style and luxury to make it distinct from the BMW portfolio (and this is the direction Jaguar is already headed)

You could even throw in a few interesting revival British roadsters into the mix.. BMW still holds the rights to Triumph!
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      09-19-2019, 11:01 AM   #15
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Maybe we'd finally see a double wishbone alu chassis 3 series if they can steal the class leading xe
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      09-19-2019, 11:02 AM   #16
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They are just as unreliable, so should fit right in!
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      09-19-2019, 11:05 AM   #17
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Tata has done a remarkable job with Jag... their design language has evolved beautifully under the new leadership. that said, getting $10B+ for a company that you bought for $2.5B does sound promising.
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      09-19-2019, 11:22 AM   #18
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Land Rover sure... cross produce the BMW suv's w a Land Rover badge...

Jaguar... that brand has almost no future to be honest.
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      09-19-2019, 11:26 AM   #19
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jaguar no thanks.

LR, I could see it being ok if they fix all those mechanical issues they seem to constantly have
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      09-19-2019, 11:32 AM   #20
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Every owner of Jaguar has had to sell because of deep financial losses. On top of that, BMW unloaded Rover themselves back in the 90s. Learn from the past, don't do it.
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      09-19-2019, 11:36 AM   #21
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Cash rich and not buyback? put back in R&D and start catch up on electric vehicle!
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      09-19-2019, 11:54 AM   #22
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oBMW is already leveraging trends towards utility vehicles with a full product offering X1 to X7
oBMW sold approximately 142k electrified vehicles in 2018 and expects this powertrain segment to account for up to 25% of sales in 2025 with nine electrified models available globally today and more to come
oBMW already offers Level 1-2 vehicle autonomy in all production models and some with Level 2+. And BMW is part of an industry wide consortium with FCA, Intel, Aptiv, Continental, Magna, Mobileye and others to launch full autonomous technology into production vehicles by 2021
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