UK: Ford seeks to make Land Rover profitable
Executives at Ford Motor Co.'s Land Rover unit want to duplicate Ford's success in turning around Jaguar Cars after buying it in 1989, Land Rover's new chairman said.
Ford acquired Land Rover in May from BMW for $2.85 billion and became owner on Saturday. The U.K.-based maker of Range Rover, Defender, Discovery and Freelander sport-utility vehicles is unprofitable. Ford aims to generate profit in 2002 and to increase annual sales to 200,000 vehicles in about five years from 168,000 last year.
At Jaguar, Ford cut costs, improved car quality, added a third model and expanded sales.
Land Rover has similar goals. They aim to trim Land Rover costs by more than 10 percent, using Ford processes, and to achieve a 5 percent net margin, or profit as a percentage of sales, in two years.
Ford will upgrade Land Rover's main factory, in Solihull, England, and buy more parts from Ford suppliers. About 75 percent of Land Rover's parts are bought from U.K. suppliers, though that percentage will decline over time, executives said. Job cuts among Land Rover's 13,281 workers are unlikely.
Dover also wants to improve quality at Land Rover, which traditionally has finished in the low end of research company J.D. Power & Associates' customer-satisfaction surveys.
Land Rover plans its biggest move to increase sales in the U.S. and Canada, where 30,000 Land Rovers were sold last year. Next year, the company will introduce the Freelander, the smallest Land Rover. It now sells only the Range Rover and Discovery in North America.