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Ford Sells Jaguar/Land Rover – When "All The News That's Fit To Print" Ceases To Be News

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I’m sure many of you have seen at least a few of the recent “news” reports that Ford will be selling its Jaguar/Land Rover operations any day now. Potential buyers mentioned (by people who should know MUCH better) have run the gamut from Fiat to Renault to a couple of Asian companies, with a few private equity groups thrown in because the Cerberus-Chrysler deal must be the beginning of a trend. Only a few weeks ago, Automotive News, that renowned and (too) oft-quoted trade weekly, let go with the spectacular revelation that Ford was just about to announce the sale of its Volvo car unit to BMW.
Wherever do they come up with this stuff?
To start with, the sale of Jaguar/Land Rover, or Jaguar alone. Or Land Rover alone or even Volvo would require Ford Motor Company to re-negotiate the conditions of the massive cash loans it took out late last year. Why, you may ask? Put simply, Ford placed its “automotive operations” (as well as a bevy of other assets) up as collateral for the much-need infusion of capital. Admittedly, the company could go to its lenders and revise its loans so the beleaguered automaker could shed one of these units, but said negotiations are rarely quick, difficult to keep quiet and always painful.
But amongst all the chatter about Jag, Land Rover and Volvo’s imminent sale(s), not a word has leaked from the financial community. Strange, isn’t it?
And regarding the acquisition of Volvo by BMW, beyond the obvious issue that Volvo brings no usable asset or technology to the Bavarian automaker, the story is a complete fabrication. It seems the idea got started at Autocar magazine in the UK earlier this year in kind of a “what if” three-liner needed to fill out a column. Within a week or so the story was passing around the European enthusiast publications. The chatter got loud enough for numerous people at BMW (execs and PR types alike) to deny it. This only created a buzz amongst a few key European business and financial rags. The result was the astonishing transformation of filler postulation into NEWS. Not it’s not strange, it is sad. Very, very sad.


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New Land Rover LR2 – aka Freelander 2

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Every Freelander sold in the USA hurt Land Rover’s image. It was a fortunate folly that Freelander lost the source of its anemic 2.5L V6 engine when Rover collapsed in England. This gave Land Rover North America a convenient reason to kill the Freeloader, uh, Freeboater, uh, Free…
Freelander continued in Europe with one engine – fortunately the EU powerplant of choice – an oil-burning diesel.
That the Freelander was a sales leader in Europe and an also ran in the USA shows how competitive the American SUV market is and how cutthroat it can be. There is simply no room anymore for a substandard entry.
Land Rover launched the all new Freelander 2, to be named the LR2 in the USA, at the British International Motor Show in London this week. It will come to the USA in Spring 2007.

L-R_07_LR2_7.jpg

LR2 Adds Guarantees Land Rover Sales Records Will Continue
Land Rover has set sales records in the USA for the past few years and remains a bright spot in Ford Motor Company’s Premier Automotive Group. If Land Rover were an independent company today, their managers would be rolling in bonus cash, but, alas, Land Rover exists within struggling Ford.
Come 2007, when the LR2 is added to the American Land Rover lineup, Land Rover will have a fourth model to add to their impressive volume achievements. Not huge volumes, but very respectable profits.
Platform Shared With Volvo’s Upcoming XC50
Based on a platform shared with the Volvo XC50 (and is a derivative of the S40/V50 platform) that comes about a year later, the LR2 carries over some Freelander styling cues including proportions that yield a hood that looks a bit too long.
Engine from Volvo Still with Full Time 4WD
In the USA, LR2 gets one engine – a 3.2L in-line 6-cylinder from Volvo turning out about 230-horsepower. This finally puts the small Land Rover in a relatively competitive position powertrain-wise, but with similar sized SUVs like the Acura RDX putting out 240-horsepower (4-cylinder turbo starting at about $33,000) and the much cheaper Toyota RAV4 V6 putting out 269-horsepower (at a bit over $22,000 for the V6) the Land Rover brand name is going to have to do double duty to attract customers.
Like Jeep-of-old, Land Rover strongly believes that all wheel drive is part of its cachet, image, reputation adn the LR2 has full-time 4-wheel drive standard with no two-wheel drive derivative available.
Interior Upgrades Very Welcomed
The interior of the LR2 is substantially improved over the old Freelander. Where it appeared that Rover engineers could not spell the word “ergonomics” the LR2 looks much more user friendly.
LR2 IP Blog.jpg

The rear seats do not fold fully flat, a packaging error from our perspective. The front passenger seat does not fold flat either… another interior compromise that should have been eliminated.
Pricing – Volumes
With the Acura RDX boldly priced at $33,000 with a 4-cylinder turbo, we’d expect the Land Rover LR2 to be positioned in the mid-$30s as well. We wish the base price actually would be below $30,000. Land Rover plans to produce 80,000 Freelander 2/LR2s worldwide with 40% headed stateside. If they put down 32,000 LR2s, Land Rover becomes an altogether different proposition in the market.


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Automotive Lease Guide Releases Residual Value Awards

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Automotive Lease Guide is an influential and closely watched barometer of the value of brands and vehicles in the USA. ALG’s data are used by leasing companies to set the values for vehicles two and three years in the future and are critical in determining what lease rates a lessee will pay.
While ALG’s Residual Value Awards are not of the ilk of Motor Trend, Automobile, Car & Driver enthusiast awards, they provide an interesting counterpoint to awards based test track measurements, zero to 60 times and seat of the pants opinions. Here is the text of the ALG release…

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ALG’s annual Residual Value Awards honor those vehicles in each automotive segment predicted to retain the highest percentage of their original price. For the third consecutive year, American Honda Motor Company, Inc. heads the list with the Honda Brand winning the Industry Brand Residual Value Award. Honda also received two individual segment awards: the Odyssey for the Minivan Segment and the Accord for the Midsize Car Segment. This is the fifth consecutive win for the Honda Odyssey and the second win for the Accord.
Acura, a division of American Honda Motor Company, Inc., is the winner of the Near Luxury Car Segment for the TL.
BMW of North America, LLC has once again made a strong showing by winning the Luxury Brand Residual Value Award for the third consecutive year. MINI USA, a division of BMW of North America, has won the Compact Car Segment for the MINI Cooper for the fourth time.
Toyota Motor Sales, USA, Inc. took home the most Residual Value Awards this year by winning six individual segment awards: the Avalon for the Fullsize Car Segment, Tacoma Pick-up for the Compact Truck Segment, Tundra for the Fullsize Truck Segment, RAV4 for the Compact SUV Segment, 4Runner for the Midsize SUV Segment, and the Sequoia for the Fullsize SUV Segment. This is the fifth consecutive win for the Toyota Tacoma, Tundra and Sequoia; and the third consecutive win for the 4Runner.
Mercedes-Benz USA LLC is the winner of this year’s Luxury Car Segment award for the CLS Class.
The Sports Car Segment award this year goes to Porsche Cars North America, Inc. for the 911 Carrera.
And last but not least, the CUV (Crossover Utility Vehicle) award goes to Land Rover North America, Inc. for the Range Rover Sport.
“In an era of negative pricing and overcapacity, Residual Value excellence is increasingly difficult to achieve,” said Raj Sundaram, President of Automotive Lease Guide. “Both the segment and brand winners clearly demonstrate that quality products combined with effective pricing strategies will rise to the top.” Sundaram added that, “While the top rankings did not change, several brands have shown significant improvement over last year, highlighting the importance manufacturers are placing on residual value as a long-term objective.”
This year’s awards are based on 2006 model year vehicles. For the fourth year, ALG has also included awards for the brand with the highest predicted resale value of all industry and luxury vehicles. The awards are derived after careful study of segment competition, historical vehicle performance and
industry trends. Award winners are featured on http://www.alg.com, The Wall Street Journal, Automotive News, and other automotive publications and websites dedicated to bringing the industry’s best performing models into the
public eye.


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Kiplinger's Best New Cars – December 2005

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Kiplinger’s Personal Finance magazine (December 2005) selects the Best New Cars in several price classes. Their selections are as follows:
Best New Car under $18,000: 2006 Honda Civic. “With its sleek, aerodynamic look, the new Civic gets more power without sacrificing fuel efficiency. Six airbags are now standard equipment.” [Best in Class: Volkswagen New Beetle]
Best New Car – $18,000 – $23,000: 2006 Hyundai Sonata. “It has classy good looks and is surprisingly refined for around $20,000. It also has the most standard safety equipment in its class.”

Best New Car – $23,000 – $30,000: 2006 Dodge Charger R/T.
“Under the hood it’s a whole lot like the Chrysler 300C. But it has a sportier suspension, a lower sticker price and the DNA of a Daytona winner.” [Best in Class: Mini Cooper S Convertible]
Best New Car – $30,000 – $45,000: 2006 Buick Lucerne CXS. “Buick’s large-sedan replacement for the LeSabre offers V6 and V8 power, heated and cooled seats, and remote start. Front bench seats are an option.” [Best in Class: Acura TL]
Best New Car – $45,000 and Over: 2006 Mercedes-Benz CLS55 AMG. “From the performance division of Mercedes-Benz comes a new class with style and luxury to spare. It smothly powers from zero to 60 mph in 4.5 seconds.” [Best in Class: Lexus LS430]
Best New Sports Car: 2006 Mazda (Miata) MX-5. “The best-selling roadster gets a thoughtful redesign. Now there is more zoom as well as more room – enough to fit a supermarket haul in the trunk.” [Best in Class: Chevrolet Corvette]
Best New SUV: 2006 Range Rover Sport. “Think of it as a rugged sport sedan, equally at home on city seats or on the savanna.” [Best in Class: Jeep Grand Cherokee Overland]
Best New Crossover Vehicle: 2006 Toyota Highlander Hybrid. “This hybrid utility vehicle gets 33mpg in the city, but it’s no slouch when accelerating. The electric motors give it more power than the V6 gas model.” [Best in Class: Honda Pilot]


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