Jaguar expected back in black

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The Independent Online
Jaguar, which has made losses in the last six years, is expected to return to profit in the fourth quarter on the back of strong US sales.

Ford, which bought Jaguar in 1989 for pounds 1.56bn, said yesterday that its luxury subsidiary was on course to make annual profits next year after losses totalling pounds 776m from 1989 to 1993.

David McCammon, Ford's president and treasurer, said Jaguar was going to see a turnaround in profitability in the fourth quarter. Ford reported earlier that in the third quarter Jaguar had an operating loss of dollars 53m against dollars 108m.

Ford itself made dollars 1.12bn on worldwide sales of dollars 30.6bn during the summer quarter, compared with dollars 463m on sales of dollars 24.6bn a year ago.

Mr McCammon said Jaguar continued to improve. He did not think its results were bad, given the fact that it launched a new model in the third quarter and had costs to lower inventories of its old model.

He was encouraged by the reception new Jaguar models had received in the US.

'If we continue to see growth in major markets, we could see a turnaround very soon.'

Jaguar is hoping to get a multi-million-pound grant package from the Government to keep production of a new model in Britain. But the company's continuing improvement could be hindered by threats of industrial unrest after workers rejected a pay offer against the advice of their unions.

Ford's third-quarter earnings were a record thanks to large sales volumes in the US and a return to profitability in Europe.

The results were above forecasts by industry analysts, but Ford's share price was unchanged on the news, having risen steadily since its Detroit rivals reported unexpectedly large profits a week ago.

Ford's worldwide car-making operations accounted for dollars 600m of the profit, dollars 578m of that from the US.

For the year, Ford is now expected to make money in Europe, Mr McCammon said. But while the company picked up some market share in Europe during the quarter - to 12.7 per cent from 12.5 per cent - its sales here continue to be below trend and 'still have a long way to go'.

Ford has not made a profit in Europe since 1990, when it earned dollars 145m.

In the US, Ford expects sales to remain healthy at least to the end of the year. 'There should be plenty of life left in the cycle,' the company said.

Cost-cutting contributed to the record US profit, Mr McCammon said, 'but volume was the big driver here'.