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.