As Jaguar Land Rover seeks to get back on track following the coronavirus pandemic there are plenty of challenges for its new boss.
Former Renault chief Thierry Bolloré has been at the helm of the Coventry car maker for more than three months now.
It is understood he has been conducting a review of the company’s operations but no big announcements on its future have yet been made.
One challenge that Mr Bolloré will certainly have been focusing on will be what to do about Jaguar.
Jaguar might be the sexier of the two brands in the JLR stable but it’s also the smaller one.
Land Rover has always had an enviable niche as being a marque that has produced desirable and sought-after SUVs, underpinned by the rugged legend that was the Defender.
And despite the whole automotive world going SUV crazy the Land Rover brand still has kudos aplenty.
Jaguar on the other hand has had a tougher time of it.
Just some of its models are made there – the XE, XF and F-Type – with the Jaguar SUV line-up made elsewhere.
Jaguar doesn’t have the advantage of having a niche like Land Rover – its line-up consists of saloons, sports cars, SUVs and one estate.
There has been much speculation regarding its future – ranging from an expanding SUV line-up to a new XJ saloon paving the way for an electric future.
Production of the new XJ, which is set to be at Castle Bromwich, has been delayed and nothing has yet been revealed about the much talked about J-Pace SUV.
So, perhaps more than ever Jaguar is at a crossroads but where will it go from here?
The I-Pace has done much to help with the reinvention of the brand but this all-electric model – which has deservedly won a host of awards – is hardly bringing electric motoring to the masses given its £60,000-plus price tag.
CoventryLive spoke to automotive industry expert Charles Tennant about Jaguar and what Mr Bolloré’s needs to do.
Mr Tennant was formerly chief engineer at Land Rover and also held senior roles at Tata Technologies and WMG at the University of Warwick.
Jaguar’s Castle Bromwich plant is still playing catch-up when it comes to a return to business as usual for Jaguar Land Rover. Why is that?
Charles Tennant (CT): “Last week Jaguar partially shuttered its Castle Bromwich factory apparently due to component shortages caused by a ‘supplier issue related to Covid’.
“It has halted production of its two saloon cars – the XE and XF – but is still producing the F-Type sports car.
“Jaguar were only planning on producing 7,000 XE and XF vehicles up to March 2021 even though they have been facelifted with new engines and better trim.
“This is a further blow to JLR’s recovery which has already been slower than its rivals and is still heavily reliant on the Government’s wage furlough scheme.
“It is a very worrying trend for the Jaguar brand, which saw sales of six out of seven of its vehicle range plunge last year, with only its electric I-Pace seeing an uplift.
“And now the range has been cut to six vehicles since the XJ vehicle was pulled from production, and its replacement all electric XJ has been postponed while a big strategic review is carried out by the new CEO – the ex Renault chief Thierry Bolloré.”
Is there such a thing as ‘the Jaguar problem’ and if so what is the nature of it?
CT: “The problem for Jaguar is not that it didn’t have a clear plan with huge investment in new vehicles and manufacturing facilities, it is that the plan hasn’t delivered profitable sales, which is a common theme for Jaguar over three decades now.
“Current sales volume is running far below production capacity, where last year the total sales across the seven Jaguar vehicles was just 140,9533 with the highest selling model being the F-Pace SUV at 43,388 and the XE and XF saloons managing only 33,675 between them.
“Even though saloon car sales across the industry have reduced due to the popularity of SUV products BMW still managed to shift plenty of their 3 Series last year – 124,537 in Europe and 47,827 in the USA.
“Over the past four decades Jaguar has seen new owners come and go with their own master plans with varying degrees of success.”
Jaguar has an amazing history though and a reputation for getting so many things just right. What was its secret?
CT: “The original architect of Jaguar – Sir William Lyons – famously ran the company on a shoestring with his low-cost tooling and second-hand assembly lines.
“But his XK and E-type sports cars of the 1950s and 1960s with their superfluous twin-cam engines and Le Mans winning race car pedigree, were beautiful cars which undercut their Italian competitors on price.
“Sir William employed an aircraft aerodynamicist – Malcolm Sayer – who styled his Jaguars with low drag coefficients, which encouraged curvaceous designs that were just beautiful.
“Sir William absolutely insisted on grace, pace, and space – and he had brilliant engineers such as Bob Knight (chassis and refinement), Walter Hassan (engines), William Heynes (vehicle engineering) and Norman Dewis (vehicle development) to ensure it was all delivered.
“To compensate for his low cost – almost prototype – tooling he also employed a workforce that were more akin to craftsmen to assemble and lead fill the body structures and build his six and twelve-cylinder petrol engines with precision.
“With the E-type being the most beautiful car in the world and the XJ saloon the most refined car, Jaguar were riding high until Sir William retired and sold out to the British Motor Corporation in 1965.
“Then it was British Leyland in 1968 and Jaguar went into the 1970s doldrums with poor industrial relations and quality problems.
“Although it did manage to launch its XJ-S coupe in 1975 – even if it wasn’t well received due to poor product positioning as an E-type replacement, when in reality it was a grand tourer.
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“By now Jaguar was losing £50m per year on sales of below 30,000 vehicles.
“The 1980s saw Sir John Egan take on the realm and he really shook up the company with a major push on quality improvement and productivity, and a big £50m investment in engineering resources to develop the XJ40 vehicle in 1986.
“A halo effect from a successful return to Le Mans racing led to a surge in sales particularly in America (helped significantly by a favourable dollar rate) from a two-vehicle line up with the XJ saloon and XJ-S coupe.
“He returned the company to plus £100m profits on sales of around 70,000 and privatised the company with a stock market flotation in 1984.”
Ford clearly saw something in the Jaguar brand. What did its tenure bring?
CT: “It was then sold on to Ford in 1989 for a whopping $2.5 billion, even though the asset value was nearer to $500m. Sir John famously saying that Ford had paid $2 billion for the Jaguar sizzle factor.
“Ford expanded the product range by adding the XK8 sports car in 1995 to replace the 21-year-old XJS, the S Type saloon in 1999 and the baby Jaguar X-Type in 2001, aiming for sales of 200,000 per year.
“But these vehicles were slated for their retro styling and use of Ford vehicle platforms and never saw their sales forecasts being met.
“Ford corrected this by eventually dropping the X-Type in 2009 and modernising the Jaguar house style with the brand new XF vehicle.
“Then in 2000 Ford bought Land Rover from BMW for $1.85 billion and created Jaguar Land Rover which was eventually sold to Tata Motors in 2008 for $1.7 billion.
“So, Ford really did lose their shirt during their ownership of Jaguar, where they never made a profit and did not even manage to recoup the original purchase price from 18 years earlier.”
What have the Tata years meant for Jaguar?
“But it looks like Tata have reinvented the Ford problem of Jaguar ownership, with a plethora of loss-making vehicles and by now a very confused Jaguar brand image.
What is required and should Jaguar take a leaf out of Tesla’s book?
CT: “Put simply, what does Jaguar stand for and what is the master plan to rejuvenate it?
“Will it become a pure electric car company in the future, and if so when will it start delivering these new vehicles and will it start with the large slow selling XJ size vehicle or go for the compact saloon size first?
“If there is a master plan for Jaguar how will it compare to the original Tesla master plan? Well let us see what that was?
“In 2006 the American billionaire Elon Musk articulated a master plan for his then fledging electric car company – Tesla – and it went something like this:
• Build a sports car;
• Use that money to build an affordable car;
• Use that money to build an even more affordable car;
• While doing the above, also provide zero-emission electric power generation options.
“At the time no one in the legacy auto sector was taking much notice of this new upstart, whilst it was missing deadlines and burning through billions of dollars only just avoiding bankruptcy.
“After all convention would have it that any tech company that survived their initial product launch stage would soon be swallowed by an incumbent legacy multinational.
“But that hasn’t happened in the case of Tesla, which is now the darling of Wall Street with its share price surging 582% this year to a mind-blowing $600 – making it now the most valuable car company in the world with a market capitalisation of $500 billion – twice that of Toyota.
“Tesla has now reported profits for the last five quarters and is about to gain ‘blue chip’ status as it is added to the American stock market S&P 500 Index this month.
“Now with four vehicles in its range covering the full- size luxury sedan, compact executive sedan, mid-size SUV and compact crossover market segments and with three gigafactories up and running in the USA and China and a German one being built it is now Tesla that could afford to buy out a legacy car company.
“Whilst the Tesla master plan was very certain in its vision – even when the road map to it wasn’t – the company has stuck at it and planned its way through to leapfrog the competition.
“It would seem that Jaguar now have a formidable competitor in Tesla and of course the German industry is also ploughing ahead with their own catch-up investment plans for electric vehicles.
“And it’s going to get very interesting now with the new CEO at Jaguar Land Rover certainly having his hands full as we wait with bated breath to see what he has planned.
“One thing is sure – for Jaguar, the future must be electric.”
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