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Last Updated: Sunday, 18 September 2005, 09:21 GMT 10:21 UK
Jaguar pins revival hope on new models
By Jorn Madslien
BBC News Business reporter at the Frankfurt motor show

Jaguar XK model
Jaguar hopes the new XK will drive a return to form
Troubled British car maker Jaguar has unveiled its sportiest car for years, along with its most expensive saloon car yet, in an ambitious push to recover both financially and in terms of sales.

The Jaguar XK sportscar is a follow-up of the XK8 that was launched to much acclaim a decade ago.

As such, it is dramatically different from, and considerably sportier than, the rest of its current range which includes the X-type and the S-type saloons - which competes against the likes of Audi, BMW and Mercedes; and the XJ - a top-of-the-range executive cruiser.

Jagura's second launch in Frankfurt is an even more luxurious version of the XJ which carries its premier Daimler badge.

Profit predictions

Jaguar's sales have recently slipped to about 100,000 cars per year. Earlier this year the group closed its Brown's Lane plant in Coventry.

Until we see a strong recovery in the Germany economy, I think Europe is going to be a challenging place to do business
Lewis Booth, Ford Europe chief

It is clear that Jaguar remains the weakest link within the Ford luxury subsidiary, although the company is loath to reveal much about the state of its finances.

"We are not going to put a date on when Jaguar will return to profitability," said Mark Fields, head of Ford's Premier Automotive Group (PAG), which controls Jaguar as well as Volvo, Aston Martin and Ford.

Jaguar has hinted previously it may break even in 2007.

PAG predicts it will make more than $300m ($165.6m; 244.5m euros) pre-tax profits this year.

Aston Martin is profitable, as is Volvo, which is showing off its C70 coupe convertible. The Swedish car maker hopes sales of the C70 will be twice those of its previous models.

Land Rover is also making progress on the back of recent launches of its popular Range Rover Sport and its third generation Discovery.

Profitable in Europe

Beyond Ford's luxury divisions, the blue oval was represented with a concept car that the company says gives a strong hint at future models - both big and small.

German Chancellor Gerhard Schroeder in Ford Iosis
Ford fears Germany's economy will put the brakes on European sales

The Iosis is a real head-turner that is likely to create waves; it borrows a string of design features from its big sisters, Aston Martin and Jaguar.

Ford is making profits in Europe, in contrast to its North American division which clocked up a $1.2bn pre-tax loss during the second quarter of 2005.

This year, Ford of Europe's profits should exceed $100m and could approach $200m, said chief executive Lewis Booth.

But it is bleeding market share, so once something similar to the Iosis arrives as a production model, its biggest challenge will be to convince drivers to buy Ford again.

Crucial election

Germany's market is crucial to Ford, and here consumers are nervous.

"It is still a very difficult market environment. We still see no sign of life in the German economy," said Mr Booth.

The economy has featured prominently during the campaign ahead of Sunday's election, with both the governing Social Democrats (SPD) and the opposition Christian Democrats( CDU) insisting they know how to bring about a recovery.

The outcome will be watched closely by Ford executives.

"Until we see a strong recovery in the Germany economy, I think Europe is going to be a challenging place to do business," said Mr Booth.

Ford Motor is set to unveil a major restructuring strategy this autumn.

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