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Analysts Push BMW to take over Jaguar Land Rover

Jaguar's deepening partnership with BMW is one to watch as analysts push BMW to take over Jaguar Land Rover.

Just a few weeks after Jaguar Land Rover and BMW announced they could join forces to develop new cars for Jaguar, analysts are now pushing for BMW to buy JLR from Tata Motors.

Automotive News Europe reported today that analysts from Stanford C. Bernstein say BMW and Jaguar Land Rover should join forces and help each other out. One solution that has been suggested is for BMW to buy Jaguar Land Rover from Tata Motors. Very confusing times for the automotive industry.

In a research note, analyst Max Warburton said “BMW is overcapitalized and awash with cash. It has run into the limits of growth for its product range."

“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.”

SEE: Who owns who in the automotive industry

Bernstein went on to say if BMW purchased JLR for £9 billion, it could boost BMW's earnings by 20%. Although, that may prove to be a bit of a hard pill to swallow from Tata.

A deal would between the two companies could prove to be "emotionally complex" due to their former relationship, when BMW owned Land Rover and the wider Rover group in the 1990s, Warburton and his colleagues wrote.

"It was a traumatic period for the Bavarian company and there are executives in Munich who are still emotionally scarred by the experience."

BMW is currently working through an £11 billion savings plan and JLR is undergoing a 2.5 billion-pound savings program and cutting 4,500 jobs. The two already agreed to collaborate on their next generation of electric cars earlier this year.

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Posted on 19th September 2019 at 2:19 PM

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