Where now for JLR’s limping cat?
In 2005, a chastened senior Jaguar executive conceded that both they and their Ford masters had made a strategic error, admitting to British parliamentarians that they had jointly pursued “a failed growth strategy” for the heritage marque. Once this realisation hit home, the residents of Dearborn’s Glasshouse began a fundamental rethink of the leaping cat.
Amongst the changes wrought was that Jaguar would henceforth emphasise its sporting credentials, with the cars’ dynamic dial being shifted from traditional values of NVH isolation and ride refinement towards matters of incisive turn-in and outright handling prowess.
The second strand to this change of ethos lay in abandoning the chase for sales volume, pushing them further upmarket. The key to this transformation was to be product-led, hence the investment in new model programmes, specifically X250 (XF) X351 (XJ) (and L320 Range Rover Sport) models, all of which were initiated and bankrolled by Dearborn. In addition, Ford’s quality control systems were adopted wholesale at Gaydon, which led to much improved build and reliability, (at least for a time).
This was a bold move by Ford, given that by 2006 it was quite evident that the Blue Oval was keen to divest itself of its English Patient. However, it could equally be said that in order to make any putative sale sufficiently attractive, there had to be something tangible in the kitty tray. To further emphasise the point, a number of years ago, well-placed former Jaguar insider stated quite forcefully to this author that Ford’s investment during the latter stages of their tenure laid the product foundations for JLR’s subsequent success.
Since 2010, Dr. Ralph Speth has been credited with one of the most impressive business turnarounds in recent times. Most commentators view his stewardship as textbook, but when it comes to the perennially limping cat, there are nevertheless some grounds for criticism.
JLR invested heavily in the modular aluminium platform which sits beneath the mainstream Jaguar range (and that of Range Rover’s Velar). Huge investment too in the Ingenium engine programme and the factory which builds them. Such was the cost that (a JLR source recently confided) there simply wasn’t the budget for suitably well wrought interiors. The result being that XE, XF and F-Pace have been graced with cabins which both look and feel markedly inferior to those of their natural rivals, not to mention their stablemates at Solihull.
While under Ford’s control, the presence of Aston Martin provided a glass ceiling to Jaguar’s upmarket ambitions, but within JLR, Jaguar has been presented with a far more immovable object in the form of Range Rover. And as the markets have turned increasingly towards luxury SUVs, the value to the JLR business of the RR brand has become such that nothing can be allowed to jeopardise its success. Hence, Jaguar has instead been subtly cheapened, a state of affairs which has created a lack of clarity for brand-Jaguar’s mission within the JLR universe.
Because JLR’s positioning for Jaguar comes across as muddled. On one hand the saloons appear rather staid, if, in the case of XE at least, tidy-looking vehicles, while the (legacy) XJ was and remains rather polarising in appearance. On the other hand, Jaguar’s F-Pace and E-Pace CUVs appear to major on practicality over appearance, not exactly a virtue synonymous with traditional notions of the leaping cat. Indeed, if one was to create a mental picture of what a Jaguar SUV ought to resemble, wouldn’t something conceptually more akin to Range Rover’s Velar spring to mind?
JLR’s Jaguar growth strategy too appears to have stalled. Sales of both XE and XF saloons are in a state of seemingly irretrievable contraction, while those of the F-Pace have also slowed noticeably. In addition, the newer E-Pace does not appear to be making a significant dent in the marketplace, and given that it is to all intents and purposes a warmed over Evoque II, one really must question its broader purpose.
A second strand to JLR’s current cost-cutting programme is to shed poorly-performing product lines, a matter of some necessity for the carmaker given that there is currently so much product overlap. Prime candidates for this are likely to be Jaguar’s slow-selling saloons unless matters can swiftly be turned around. Indeed some have begun to question the validity of brand-Jaguar at all, given that potentially at least, JLR can probably derive the volume they require by stretching the Land Rover/Range Rover product lines in appropriate directions.
Fortunately for Jaguaristes, Dr. Speth currently remains committed to the leaping cat. Recent reports suggest JLR are considering repositioning Jaguar as a pure EV brand, which might be the best chance for the nameplate’s revival. Already, a hybrid/EV XJ saloon is believed to have been sanctioned for 2020, which will be pitched at Tesla’s Model S and forthcoming prestige German opposition. A single-model replacement for XE/XF is also a possible outcome, should management elect not to go fully-crossover.
If all of this sounds familiar, it’s because history does tend to repeat. Ford attempted an ill-fated growth strategy during the previous decade and failed. JLR has latterly attempted something similar (too similar some feel), and appears to have foundered upon similar reefs.
Analysts are probably correct in suggesting that JLR have spread themselves too thinly in their attempts to grow the business. But one doesn’t need to be a member of the investment community to understand that JLR needs to abandon its ambitions towards Jaguar as a volume brand. Furthermore, there is a strong argument to be made that Dr. Speth really ought to do less across the board, but execute it better.
Chasing volume has never been a viable strategy for Jaguar, a marque whose appeal has never been universal, even when the cars enthusiasts revere were in production. The problem now for JLR is having shifted Jaguar downmarket, where now? One has to hope the electric shock won’t kill the patient.
Driven To Write 
A great analysis, Eóin, and I absolutely agree with the viewpoint that JLR needs to do less, but with better execution. The Evoque II and Velar are both rather more convincing propositions than the E-Pace and F-Pace and are likely to further hurt sales of the latter pair, potentially making them irrelevant. In reality, the Evoque II and Velar are the “Road Rovers” that make LR a full-line premium player without any help from Jaguar, at least as long as crossovers remain so much more in demand than traditional saloons.
The original XF’s distinctive coupé-like design brought something different to the market and sold strongly but its replacement, and the XE, are ultra conventional “me too” designs that are really struggling against their German competitors. The XJ is a polarising design, but the worst thing Jaguar could do is replace it with a more conventional looking model, repeating their mistake with the XF. The I-Pace is a highly distinctive and great looking car that may signpost the best future direction for Jaguar, as long as the underlying technology is up to the task.
Jaguar is in danger of finding itself in the same position of Alfa Romeo: a brand enjoying great affection, but unable to achieve the level of sales that would make it sustainable in the long term.
“Huge investment too in the Ingenium engine programme and the factory which builds them. Such was the cost that (a JLR source recently confided) there simply wasn’t the budget for suitably well wrought interiors…. Recent reports suggest JLR are considering repositioning Jaguar as a pure EV brand,…”
When Jaguar finally disappears, and the post-mortems are written, I think a lot of the decline in the brand will be traced to ill-considered or unlucky engine decisions.
Jaguar sold itself in large part to fund the production of the V12. They bought a very expensive automated production facility for V12 volumes that never materialized, the derived V8 and inline 6 never made it to production and the V12 engine was introduced just as the first oil crisis hit.
The XJ40 was designed for inline engines to preclude having the Rover V8 forced on them. Then, when they finally decided to put the V12 in the XJ40 and X300, they spent the money to redesign the cars and the V12s sold poorly anyway and were killed by US emissions.
The AJ6/Aj16 was a compromised design itself with an excessive deck height and connecting rod length for a diesel version that never materialized.
Then Jaguar had to have their own V8 (rather than use the Lincoln 32 valve) so they killed the AJ16 and went V8 only. Then when they needed sixes they didn’t have one and had to use a Mondeo Duratec.
Jaguar bet big on diesels, but now the EU in its infinite wisdom (!) has decided that diesel is not the ecological saviour of the earth, but a toxic poison machine that needs to be taxed off the road.
And now, JLR has spent all its money on the Ingenium (where are the 6 cylinder Ingeniums that were announced in 2017?). And Jaguar plans to make an all or nothing bet with all-electric? Where will they get the money to fund a competitive development program ?
Sorry this is so long, but let me close with this.
Small manufacturers should never make all or nothing bets on powertrains. In the 1960’s and 70’s, several manufacturers bet big on wankel engines.
When the wankel didn’t pan out, it was no big deal for GM, Mazda was seriously impaired, and NSU and Citroen went bankrupt and were taken over.
I think you are absolutely right.
Or, if the Ingenium engines had been better, it would have made the cars more appealing and justified the investment.
The main thing that puts me off a Jaguar is the lacklustre engines… it makes it worthwhile to seek out a used XE with a Ford engine, which is a ridiculous situation.
Just returned from the pre-Christmas supermarket shop.
In the car park was a racing blue E-Pace.
That’s two then on the road.
On the journey home, every other car seemed to be a diesel engined Land Rover. Stacked full of Christmas shopping.
I see what you mean with Alfa Romeo and Jaguar in similar pickles;
Perhaps Father Christmas might bring both manufacturers a hastily needed stocking full of goodness?
This sort of thing doesn’t help JLR:
https://www.autoexpress.co.uk/car-news/87771/chinese-copycat-cars-pictures
This article shows the scale of the impact on their business:
https://www.autonews.com/article/20170424/OEM03/304249964/land-rover-hits-landwind-headwind
https://www.tms.org/pubs/journals/JOM/0108/Kelkar-0108.html
I wanted to post a link to this article, because it has another piece of the puzzle for why JLR (especially Jaguar) are in such trouble.
JLR chose an aluminum body assembly method that uses stamped aluminum sheet similar to how a steel car uses stamped steel sheet. The Audi A8 uses an aluminum space frame.
The tooling for aluminum stamping production is very, very expensive – double or more for small vehicle volumes. The Audi has cheaper tooling because only the close panels are stamped. The A8 structure is extrusions and castings.
JLR has very limited ability to change the styling or structure of their aluminum vehicles because they can’t afford to.
Aluminum stamping construction is another reason not to allow your vehicle designers to run wild. Because when their “edgy”, “controversial” styling decisions don’t pan out, you are stuck with them anyway because you can’t afford to change !
I remember JLR’s much heralded investment in Aluminum platforms. This was going to be the killer tech which would give them an advantage over their competitors.
It hasn’t worked out that way. The ‘mixed material’ approach used by the German big three is more flexible and often lighter.
Alongside relatively inefficient engines, JLR products are often thirstier and dirtier than their rivals. This is killing them on fleet sales and lease deals.
Jacomo, “first mover advantage” usually isn’t.
The claim is that the early bird gets the worm, but in the real world, the second mouse gets the cheese !
Somewhat behind the DTW curve ANE might be, but late is better than never, one supposes…
https://europe.autonews.com/automakers/why-jaguar-land-rover-losing-money-and-how-it-plans-return-profit
Some serious food for thought however…
Quite stark to see it laid out like that. China was always bound to be a volatile market that would come back down to Earth eventually, and Trump really could make things worse.
Everyone who likes cars should applaud JLR’s investment in R&D but you can’t help but wonder if all of that money was wisely spent.
Converting Jaguar to an electric only brand seems smart, but will customers perceive it that way? Tesla looked, sounded and acted like a breath of fresh air from the start… rebranding Jaguar will be hard.
And – finally – their voluntary abandonment of the working vehicle market does look like folly. Yes, a new body-on-frame chassis to support a new Defender would have cost money, but probably money that could be recouped over a long period of time. It also gives JLR access to more of the market. Turning the Defender into a ‘premium lifestyle’ vehicle is risky if those customers dry up.
JLR, just one disastrous decision after another.
LR could build everything they make on one BOF platform, since all their vehicles are essentially the same width now.
Instead, they have aluminum stamping unibody vehicles – the highest tooling cost and model change costs in the industry.
Their Ingenium engine program is supposed to be modular to produce different engines. Great ! The problem is that modularity doesn’t seem to include engines preferred by SUV buyers in North America.
Even entry level SUVs here require a V6, and SUVs at LR price points typically have a V8.
But LR is trying to sell people on SUVs with 4 cylinder turbos. In North America, that is an economy car engine.
Next recession, these guys are gone. To bad, because both LR and Jaguar have such great histories.