Cash-Rich BMW Should Buy ‘Severely Challenged’ Jaguar: Bernstein
That’s the message from Sanford C. Bernstein analysts, who say BMW AG should buy the British luxury brand from India’s Tata Motors Ltd.
“BMW is overcapitalised 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 U.K., where it makes Mini and Rolls-Royce cars.
BMW previously owned Land Rover, which was not a resounding success for either; BMW lost a fortune on the deal, and BMW powered Range Rovers were the most troublesome in their long history.
The success of a new BMW ownership of JLR would depend, imo, upon the latter being able to keep its own Land Rover and Jaguar identities and manufacturing, together aiming upmarket of BMW having their own development of any shared technology, much as they did with Ford during their ownership.