I have written a brief article for this morning's edition of the Scotsman on the prospect of a bailout for Jaguar Land Rover. Unfortunately, it is only available to subscribers but these two sections seem relevant to Ridley Grove's post:
"Jaguar and Land Rover are both luxury marques and demand will fluctuate with economic conditions.
Tata is a big company; it is India’s biggest car maker with revenues of $8.8 billion in 2007-08. If it wants the prestige and, in good times, healthy returns that come with owning luxury marques then it will have to put money into Jaguar Land Rover to keep it afloat when conditions are tough. We absolutely shouldn’t set the precedent that a major foreign multinational can play heads I win, tails you lose with the British taxpayer.
If the Government want to help the company it should rethink some recent policies that clearly make it harder for people to keep Jaguar and Land Rover in business the old fashioned way – by buying their cars. Plans for eye-watering increases in Vehicle Excise Duty on big cars may have been delayed but they will still be alarming potential buyers. Increases in Fuel Duty are disproportionate – charging motorists far more than is justified by the need to build and repair roads or the potential contribution of motoring to global warming. Emissions standards are being tightened extremely fast and it is hard for smaller manufacturers like Jaguar Land Rover to keep up.
[...]
If the Government want to tax and regulate people out of buying luxury cars then they should be honest with the public that such a move is sending Jaguar Land Rover the way of the dodo. Bashing Land Rovers and Jaguars one minute, and then bailing out the company that makes them the next, is either muddled thinking or playing dishonest politics at the taxpayers’ expense."
