WHEN Bill Hayden, the car-industry veteran brought in by Ford to turn round Jaguar, first saw the Brown’s Lane plant in Coventry, his verdict was succint. “The worst I’ve seen outside Gorky,” he said, a reference to an infamous Soviet car plant.

Hayden’s visit was in 1989, when Ford had just paid £1.6 billion for the famous British marque, the vehicle of choice for Inspector Morse and Austin Powers.

Last week, as first revealed by The Sunday Times in November, Ford sold the company, together with stablemate Land Rover, to India’s Tata for £1.15 billion.

In the intervening two decades, Jaguar was Ford’s English patient. Despite huge cash injections, it remained — apart from a purple patch covering six years — stubbornly loss-making. In total, Ford invested about £3 billion, including the initial purchase price. To rub salt in the wound, the American carmaker now has to pay another £300m to top up the Jaguar and Land Rover pension funds as a condition of the Tata deal.

Jaguar’s woeful record might make some question the wisdom of Tata’s purchase. Its timing, however, looks better than Ford’s.

First, Land Rover, the other half of the acquisition, is in good shape. According to sources close to the negotiations, the four-wheel-drive vehicle specialist made about $1 billion last year, while Jaguar lost about $250m.

Buoyed by successful new models, Land Rover sales are growing, reaching 226,395 last year, compared with 153,496 a decade ago. Jaguar is heading the other way, selling 60,485 last year, compared with 120,570 at the height of production in 2003. Brown’s Lane, the plant that so horrified Hayden, has been closed.

Tata may also have learnt a valuable lesson from Ford. The American group was roundly criticised by motor-industry analysts for interfering in the running of Jaguar, in particular with the decision to make a small car, the X-type, which was judged a failure.

Ratan Tata, the patriarch at the head of the Tata conglom- erate, said he will let Jaguar and Land Rover have their heads. “These are iconic brands that I respect enormously,” he said last month. “Our plan is not to tinker with them in any way. We want to retain their image, touch and feel. Our interest is not based on outsourcing or taking technology. We have a global responsibility to make them grow and take them forward.”

Jaguar’s management has ideas to invigorate the brand.

It would like to have a smaller sports car to challenge the Porsche Boxster and has proposals for a series of variations on the XF and XJ. The trouble is that all these need money; Jaguar has not been making any, and Ford was unwilling to put in further investment. It remains to be seen how far Tata’s funding will extend. But unless the range is widened, it is hard to see how Jaguar will grow.

Ford will continue to provide engines, stampings and other components and becomes the main supplier to the new owner. It is understood that the terms of the sale include a restriction on passing Ford technology to any other party. That may thwart the ambitions of Fiat, partner in several joint ventures with Tata, which has been eyeing the Jaguar XF chassis platform as the basis for a new Alfa Romeo.

We asked some motor industry experts for their views on how Jaguar might be put back on the road. Below is their verdict.

Trevor Finn, chief executive of Pendragon, owner of Stratstone, a leading Jaguar dealer in Britain and America

Jaguar is a fantastic brand and Tata is a very credible brand manager. I am sure the takeover will be seamless from the customer’s point of view.

The Jaguar range would benefit from more breadth rather than depth. It should stay in the luxury segment but have more to offer, spread across the market rather than going downmarket. Look at the Mercedes E-class — there are saloon, coupe, convertible derivatives, meeting different market requirements around the world. Jaguar could do the same with four or five derivatives from one platform but this would need extra investment, a commitment at the outset.

The smaller sports car that is talked about could be one derivative; these days such a model does not have to be a totally different car if its visual appearance is distinctive.

Long term, there is no reason why Jaguar should not be a credible rival to the German premium brands. In the past, the authenticity of some of its cars has been questioned but the new XF gives a great start for the new owners.

Jaguar is coming back in America. The XF has had a good start and is well positioned.

Jaguar ought to have a profit ambition, not a volume ambition. In the volume car business, volume equals profit. With premium cars, profit can deliver volume — you make cars that people want to buy, create demand.

Customers in this market are well educated, they understand the market and know all about residual values. Porsche is a good example. It is capacity constrained, so demand is high and this makes the cars more desirable. Porsche plays the market cleverly and has created a virtuous circle.

In 1988, we made a presentation to Jaguar showing that Jaguar in Germany was in the same position as Porsche in Britain. At that time both companies were making about 40,000 cars a year. Look where they have gone since.

Professor Peter Cooke, car industry expert at Nottingham Business School

Tata needs to stand back and let Jaguar be Jaguar. It has suffered from the size 14 boot of Ford meddling. Ford’s plan to turn it into a volume carmaker was not a good one — it now has to move on from being a posh Mondeo.

Jaguar should make fewer cars and aim at an average sale price of about £50,000. There is a global market for the right kind of premium car, and that means Russia, China and India. They don’t have to outsource production overseas — they already take some components from offshore sources, and in car-industry terms their production rates are small, so you don’t get that much more benefit from assembling in a low-wage economy.

Above all, it is not mission impossible. If you ask small boys about the cars they love, they say Porsche and they still say Jaguar.

Tom Donnelly, professor of automotive business at the Motor Industry Observatory at Coventry University

The Ford idea that Jaguar could make 200,000-300,000 cars a year was crazy. It should be making 100,000 at the most. It is a niche product and the company must choose its battlegrounds carefully. If it cannot improve the profit per car sold, it is finished.

Tata must play the country-of-origin card. Jaguar is an English brand, not a British one. The cars should be sold as Made In England.

John Wormald of the consulting firm Autopolis

I would keep Jaguar narrowly focused on the top-end models. It was a big mistake to spread the range. Jaguar never broke through to be a competitor with BMW and Mercedes.

Its natural position is closer to Porsche — agile cars with a special style, quite distinct from BMW and Mercedes. Porsche has devotees, not customers — a limited group of people who re-purchase, coming back time and time again.

I am wary of making a small sports car. It has the danger of pulling Jaguar downmarket.

Mark Gillies, executive editor of Car and Driver (America’s biggest car magazine)

Look at the contrast between Land Rover and Jaguar. Land Rover has two great things in its favour: it has a fabulous brand image and fantastic styling. The Range Rover is a bling-bling luxury vehicle but the XJ looks like something your grandfather would have bought. Under Ford’s stewardship, Jaguar lost its way with the product.

There is a strategy issue. Most luxury manufacturers start with an entry-level model — like the 3-series BMW. When that buyer gets more money he proceeds to a 5-series or an X5. If you don’t have an entry vehicle, it is difficult to draw buyers in.

The X-type didn’t work. Jaguar didn’t have a history of dealing with cars in its price range and didn’t know how to sell them. It was advertised at below $30,000 but the cars in the showrooms were priced over $45,000.

The XF is a handsome car that could stabilise Jaguar’s falling sales in America. But ideally the company needs a new small saloon as an entry to the range.

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