BMW announced today (Friday) that is will sell Land Rover to Ford Motor Company for $3bn. The news comes a day after the shock decision by the German car maker to sell Rover Cars to private equity group Alchemy Partners.
The move has confounded analysts’ expectations, which were centred on BMW retaining the profitable Solihul-based manufacturer. Many saw it as the main reason BMW bought Rover in 1994.
However, BMW said in Munich today that there was now too much of a clash between its new off-road vehicle, the X-5, and the Land Rover range. It also said the high pound and the failure of the UK to join the euro had also played a part in the decision.
Following yesterday’s developments, it is now clear that only the new Mini production will be retained by BMW, and it will be shifted to Oxford. BMW will however continue to manufacture the Rover 75 at Oxford under contract for Alchemy for the next two years, before production is shifted from Oxford to Longbridge.
Land Rover, which has benefited from the launch of the Freelander and development of the Discovery and Range Rover models under BMW’s ownership, now sells 200,000 units per year. This is set to grow as the Freelander, which is not yet on sale in the US, makes its debut there in two years’ time as part of the Ford network. Ford will add the brand to its Premier Automotive Group, now headed by former Rover boss Wolfgang Reitzle, who resigned from BMW over a split over the future of Rover last year. Other British brands in this group include Jaguar and Aston Martin.
The sale is expected to be completed by the summer, subject to regulatory approvals.