As inevitable as death, taxes, and global pandemics. What’s that? Ah yes, Jaguar’s in trouble again. Haven’t we been here before?
An automotive reckoning, long-postponed, now seems imminent. We of course should have had it long ago, and had the surging Chinese economy not mopped up all that excess capacity over the past decade or so, we would be talking about a rather different automotive landscape today.
But not only did the Chinese Crouching Tiger to some extent help prop-up otherwise floundering businesses (and certainly, one could point to Groupe PSA’s remarkable resurgence being in no small part aided by Dongfeng’s largesse), it also made a significant contribution to a lopsided industry model with an over-reliance upon high-end, luxury products.
It isn’t wildly hyperbolic to suggest that Jaguar Land Rover’s post-2010 successes were to a very large extent a product of Chinese market forces, and if anyone doubted that, one only had to witness the stark reversal they faced a year ago once that demand evaporated amid a market downturn and a serious customer backlash. Cost-cutting and rationalisation ensued but just at a point when the business seemed poised to stage a fightback, the pandemic struck.
Like everyone else, JLR will face a slow and very difficult recovery from the total collapse in car demand earlier this year. This would be enough for anyone, but coming as it does in concert with a host of other potential setbacks – some politically motivated, some entirely of their own making – the future looks very difficult indeed.
On the upside (and pre-C-19, this looked like the only product-related upside for 2020), Land Rover launched the newly reimagined Defender late last year, a vehicle which not only has been broadly hailed as a creative success, but one which bears the hallmarks of being a commercial one as well. But with production barely restarting, it will be some time before any potential can be translated into sales.
Downsides however are multiplying as fast as C-19 cells in a human organism. Ageing model lineups, ill-considered product actions leading to product overlap, and a drivetrain strategy which still falls short of market or upcoming regulatory requirements – to say nothing of persistent and seemingly unresolved durability concerns, mean that neither profitability nor growth targets have been met.
Management have since doubled down on reducing costs and have recently announced that a further 1000+ jobs will be cut, but there are only so many roles one can do without. Last week however, saw some (potentially) welcome news when it was announced that senior management are re-evaluating forward model programmes which may involve pausing, refocusing or cancelling new (or existing) model lines as part of its cost-cutting measures.
Carmakers of course do this sort of thing as a matter of course (at least the prudent ones), since nothing stands still for very long either commercially or from a regulatory perspective. However, a serious, forensic review of the entire JLR product offer is long overdue.
Part of this exercise is set to encompass a further bout of soul-searching over the fate of brand-Jaguar. According a report in Automotive News, JLR’s Chief Commercial Officer, Felix Bräutigam will head a review of the storied, if serially underperforming nameplate’s future; a JLR spokesman quoted as saying, “The team is focusing squarely on what is the brand positioning of Jaguar and how we are going to make it sharper. And how we ensure the portfolio we have is in sync with that position“.
When Ford bought Jaguar in 1989, they took over a business which was chronically underfunded, with manufacturing capabilities mired in the nineteenth century. They deserve great credit for helping turn that deficiency around and drag the business into the modern era. Creatively and commercially however, their stewardship was a hugely expensive failure. It took Dearborn a decade and a half to realise they had made a serious error of judgement and begin to reset the dial towards being the more seductive specialist manufacturer they had been prior to acquisition.
Those who fail to learn from the mistakes of the past are destined to repeat them, and it’s incontrovertibly clear that JLR management have not learned from Ford’s misapprehensions. Not only that, but it has taken the Warwickshire-based carmaker a similar amount of time and a similar litany of expensive commercial errors to reach broadly the same conclusion. Apart from the I-Pace EV, is there anything currently bearing the leaping cat that doesn’t inhabit a spectrum from disappointing to mediocre?
Jaguar, one of the greatest, most emotive names in automotive history has been reduced to an irrelevance, one where commentators and analysts cheerfully ponder the legitimacy of its continued existence. For all their detractors, Ford never achieved that level of apathy – this has happened across JLR CEO, Ralph Speth’s watch.
The crux of the problem lies with the Gaydon-based car company’s ideas around Jaguar’s market positioning and by consequence its relationship with Range Rover. Since JLR elected (quite sensibly) to broaden the RR range, it has had the effect of essentially cutting Jaguar off at the knees. Whereas once both brands co-existed in relative harmony in terms of position and pricing, now RR sits imperious, truly above and beyond. Indeed, such now is Range-Rover’s sector-reach that the only inviolate Jaguar-branded offering is the two-seater F-Type, itself based on a platform which dates back to 2003.
It’s a dispiritingly repetitive story. Expensively developed, but wrongly-scoped products fail in the marketplace, saddling the brand with debt and preventing further, much needed product investment from taking place. Both Ford and JLR’s product strategists have much to answer for.
Clearly matters have come to a head. Any 2020 review of brand-Jaguar must not only be gimlet-sharp, but decisive and given the current state of affairs, comprehensive. Its compact saloons are lost causes, its crossovers an irrelevance, simply leeching resources from the core LR/RR products. JLR, now facing a series of existential threats, needs to refocus upon a far more targeted Land Rover/ Range Rover offer. If Jaguar is to be maintained, it must be returned to its core competencies and that entails a vastly reduced, but far more targeted offering.
JLR’s marketers believed they could position Jaguar as their commodity brand, selling in Europe (at least) to the fleets who make up so much of the big three German prestige players’ customer base. Hence the relentless benchmarking against their BMW and Audi rivals and products which in execution terms lacked the warmth and seductiveness, once synonymous with the marque. How this was supposed to play in markets like North America, where ideas of the brand remain stubbornly embedded in a more traditionalist, more indulgent aesthetic are anyone’s guess. In the end, these offerings have left everyone wanting and faltering sales reflect that reality.
How is it that in most cases, JLR management have broadly been on point with Land Rover and Range Rover’s offerings, yet so apparently tone-deaf when it comes to the leaping cat? Can it be that there is such a fundamental misunderstanding of the brand at senior management level, or is it that it has been allowed to drift so far that like Lancia, nobody is capable of unpicking the puzzle of how to reanimate it?
Given that Jaguar’s problems are ones largely authored by senior management, in concert with JLR’s marketers, it’s somewhat ironic not only that CEO Ralph Speth is set to step down this autumn but also that the carmaker’s current marketer-in-chief will now be the architect of the brand’s future path.
Sometimes it requires a crisis to concentrate minds and JLR now have several to contend with. Covid-19, the imminent demise of diesel, the strong likelihood of Britain exiting the transition phase of EU departure without a trade deal – all will to a greater or lesser extent impact negatively upon the business – one which owing to its location, is uniquely exposed.
Jaguar has been many things in its long life, but above all, it has been a survivor. It’s possible the brand will survive this too, but only if it is provided with both the vision and the resources to fully be itself once again. One must hope somebody with sufficient foresight takes Mr. Bräutigam gently by the elbow across to Gaydon’s Heritage Collection so that he might be reminded of what a Jaguar ought to be – because this cat is fast running out of lives.