JLR mulls bid for taxi operator Addison Lee as carmakers position for tech shifthttps://www.telegraph.co.uk/business/20 ... tion-tech/Struggling Jaguar Land Rover is considering a bid for the minicab operator Addison Lee as it attempts to navigate the challenge to car ownership from Uber and driverless vehicles.
Addison Lee’s owner, US private equity firm Carlyle Group, has hired Bank of America and Rothschild to try to sell the business with a target price of between £300m and £500m.
Prospective bidders are examining Addison Lee’s financial details before deciding on whether to submit an offer. JLR is among other car manufacturers, tech players and private equity firms looking at whether to bid, according to sources close to the process.
Britain’s biggest car maker is battling a slump in demand for diesel vehicles and falling car sales in China that contributed to it booking a £3.4bn loss when it posted quarterly results in February. At the start of the year the Coventry-based car company said it was cutting 4,500 jobs – about 10pc of its global workforce – as it steers towards its first annual loss in a decade.
The job cuts were part of JLR chief executive Ralf Speth’s £2.5bn cost-saving “Charge and Accelerate” plan as JLR reshapes to adapt to the rapidly-changing car industry.
The challenges big car makers face include self-driving technology and electric vehicles – which JLR has lagged in developing. Advanced electric vehicles which do not need a driver could also upend traditional vehicle ownership models.
Instead of owning a car and facing fuel, maintenance and tax bills, more people could choose to summon a vehicle that fits their needs, potentially for just a single journey.
Potentially joining forces with Addison Lee is just one of the ways JLR is positioning for the future. The two businesses are already working together in a Government-funded autonomous vehicle research project called ServCity. This aims to trial driverless cars within three years, with tests in London and the Midlands.
Last year JLR landed a massive deal to supply Waymo, Google’s self-driving car division, with up to 20,000 battery-powered Jaguar I-Pace cars.
Backed by the financial firepower of its web-search parent, Waymo is seen as one of the front-runners in the development of self-driving technology. Jaguar has said the I-Paces will be supplied with “production ready” self-driving technology.
Although JLR is Britain’s biggest car maker, it is small by global standards, producing about 600,000 vehicles a year. This compares with more than two million for rival high-end manufacturer BMW but is dwarfed by the almost 10 million a year built by the two biggest manufacturers, VW Group and Toyota.
However, even the largest automotive companies are seeking tie-ups and partnerships with start-ups, tech companies and rival manufacturers as they look to share the cost of developing electric drive trains and technology that eliminates the need for a human behind the wheel.
For Addison Lee, an alliance with JLR could help ensure its future. The global taxi market has been shaken up by the impact of companies like Uber gaining in popularity by lowering taxi fares and introducing accessible smartphone technology.
Addison Lee was founded in London in 1975 and is Europe’s largest private hire car service company, completing 10 million journeys a year in 350 cities worldwide with more than 4,800 cars in London.
Carlyle bought a majority stake in Addison Lee in 2013 which then valued the business at £300m including debt. It has since made bolt-on acquisitions such as Tristar Worldwide and US rival Flyte Tyme. According to the company’s most recent accounts, revenues grew by 23.6pc to £345.8m in 2017.
A JLR spokesman said: “It is our policy not to comment on speculation.”
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