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Ford/Jardine tie-up

31st December 1998
Page 46
Page 46, 31st December 1998 — Ford/Jardine tie-up
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Which of the following most accurately describes the problem?

Ford is taking a stake in four Iveco Ford dealerships thanks to a joint venture with the multinational dealer group Jardine.

The venture is primarily intended to own and manage the 11 Ford car and light commercial dealerships in Jardine's Lancaster group. The Iveco Ford outlets—in Northampton, Milton Keynes, Bedford, and Batley—are affected because they are tied up with Ford franchises.

"They use common facilities, and it would be physically impossible to separate them," says Jardine International Motor Holdings chief executive Peter Ward. "Iveco has raised no objections to the deal going ahead, and there are no plans to dispose of the Iveco Ford businesses."

Jardine holds a 51% share in the joint operation, with Ford holding the balance. Lancaster director Alan Jones has been appointed chief executive.

Jardine also owns the Lancaster Truck & Von Mercedes-Benz dealership in Bristol, which now covers the West Country down to the tip of Cornwall, following its takeover of the former John Hewitt territory in Devon and Cornwall. There's also a Lancaster Mercedes rcial vehicles outlet in Thurrock, but neither of these operations is d by the joint venture.

ddition Jardine has a major des truck franchise in northern comml Essex, affect€ In c Merce France, and imports Mercedes trucks into Hong Kong and mainland China.

Profit margins on the sale of new trucks are meagre, says Ward. "You're dealing with a high-priced item sold at a low margin, so the figures look a bit strange, but it all begins to look a bit healthier if you consider the return on the assets the dealership employs," he adds. "We enjoy being in the truck business, and we would expand further in it in the UK given the right opportunity. "When we first looked at buying the Appleyard group its Scania franchises were among the initial attractions, Ward concludes. "But Scania decided to take them back in house."


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