Number Nine Life

As inevitable as death, taxes, and global pandemics. What’s that? Ah yes, Jaguar’s in trouble again. Haven’t we been here before?

Unconvincing. (c) car magazine

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.

More on Jaguar.

Author: Eóin Doyle

Co-Founder. Editor. Content Provider.

20 thoughts on “Number Nine Life”

  1. Good morning, Eóin. Thank you for your perceptive and worrying analysis of the latest crisis to assail Jaguar. The attempt to mimic and compete directly with the German premium trio has clearly been a failure. The recently deceased XJ was a bold design that proved to be too polarising for a very conservative market segment. The XE and XF are selling in comparatively trivial numbers. They are not bad cars, but are curiously bland and lacking in character, possibly as a consequence of the XJ’s rejection.

    The E-Pace was done on the cheap, and it shows. The F-Pace seemed to be a strong seller after launch, but I see worryingly few of them around. Then there’s the F-Type, a car that tried to straddle the sports car and GT coupé segments, but failed to satisfy either fully and has now lost the most appropriately sized engine for most buyers, the 3.0L supercharged V6. There’s now a yawning gap between the 2.0L turbo four and 5.0L V8.

    That leaves the i-Pace, which supposedly very good, but also very expensive for what you get. Jaguar desperately needs a new and highly distinctive model that really wows the market in the way that the original XJ did in 1968. Perhaps the new electric XJ will be that car? I really want it to succeed as the motoring landscape would be very much the poorer without Jaguar, just as it is without Lancia.

  2. Interesting article indeed. I am just puzzled by how Jaguar have survived so long.

    I might be naive but why would you keep putting money into a product that has failed for so long. What am I missing?

    1. Hi Mike. I would guess that it’s simply the romance and allure of the marque. Most people with an interest in matters automotive love historic and storied marques like Jaguar, Alfa Romeo and Lancia and want them to prosper. They will speak with great enthusiasm about them but, when it comes to spending their own money, the vast majority will buy German instead, perceiving it to be the safer option in terms of reliability and resale values.

      Alfa Romeo is, like Jaguar, trying to find salvation in crossovers, but Jaguar’s experience with the E-Pace and F-Pace, as well as the Stelvio’s limited success, must be worrying for the Italian marque. Lancia is, for all practical purposes, already in the mortuary.

      Successive owners of Jaguar all think they have the expertise to ‘leverage’ the strength of the brand into greatly increased sales, but experience suggests otherwise. I wonder how much longer Tata’s patience will last?

    2. Let me tell you sunshine, I have an XE and it’s the best bit of kit I have EVER had. Beats Audi A4 into a cocked hat! These stories are exactly as the are described ‘stories’! Just to give the mindless media something negative to write about!

  3. In a clear case of itoldyousonitis, I predicted exactly this five years ago. My conclusion is somewhat different from yours though. Instead of nudging Felix towards the horror cabinet of the automotive industry at Gaydon, take him to an open doors day of the vehicle design department at Imperial College, lest you wish the next Jaaaag to be some Laura Ashley grade retro clown car à la S-Type. Oh, and take him to a men’s fashion show as well, while I’m at it.

  4. I think we have to face the reality that the market is working against Jaguar at the moment. Its home-ground is saloons and sports cars and both of those sectors are in retreat. Equally, the timing of its investment in the Ingenium diesel/ petrol engines was unfortunate, as they launched into the back-lash (particularly for diesel) stirred up by VW’s ‘diesel-gate’ fiasco.

    Hence, it has had to force itself into building SUVs, which don’t naturally align to the brand, and which literally look awkward compared to their LR/ RR equivalents – Evoque trumps E-Pace, RR-Sport/ Velar trump F-Pace (to my eyes at least). The one success has been the i-Pace – in terms of engineering, styling (arguably) and timing, Jaguar is ahead of the market. Ironically, I wonder if it is ahead of market tastes too and, hence, whether a more conservatively styled saloon and/ or SUV would have be selling better?

    Looking forward, I have read ‘talk’ (by Julian Thompson) of developing and launching a smaller hatch, inspired by the RD-6, and letting the slow-selling XE and XF gradually dwindle and die-off. This would create a big gap in the range, which makes me think that this is a case of people extrapolating and speculating on the basis of his words about the potential for the smaller hatch. Surely, at least one of the XE or XF is needed in the range in the longer term? If this was to end up being the case, then suddenly Jaguar’s range starts to look like Alfa’s – patchy and incoherent.

    1. You can´t build a brand up from a small model. I´d say Jaguar should be culled to two really good saloons/estates conceived like the Jimny on long model cycles and incremental improvement. Do you know what that is? A specialist car maker which is the role Jag did best at.

  5. I would add two extra factors to the general conglomeration dragging Jaguar towards death: the demise of the saloon car market, and aluminium. I would add two extra factors to the general conglomeration dragging Jaguar towards death: the demise of the saloon car market, and aluminium.

    In an age when American manufacturers are cutting cars of any shape from their line ups, and even the Germans are shifting the core of their line ups towards CUVs, saloons have become a niche within a niche. Unless you’re BMW or Toyota, there simply isn’t the volume. Chinese demand masked this for a while, but I doubt their volumes will recover now that Covid-19 has suppressed worldwide demand for Chinese goods.

    The second factor is that Jaguar’s big bet on aluminium hasn’t paid off. Aluminium transmits noise more readily, so while a Jaguar body in white may be slightly lighter against a steel equivalent, that is more than offset by the increase in insulation required to quell rampant NVH. BMW have played the weight loss game much better, using composites and magnesium to acheive a similar effect for much reduced overall cost. Factor in the raw cost of alumium, at least 25% more than steel, plus the extra R&D that comes with swimming against the industry tide, and Jaguar’s margins winnow from thin to non-existent.

    1. Chris, I can add a potential third – the skills required to compete with Tesla as they increasingly go down the EV route.

      I watched the video, below, from Fully Charged, recently, and it details the problems Volkswagen are having. In short, it appears that they don’t do much of their own coding / writing their own software.

      Do Tata have the skills needed?

    2. Chris, in addition to your astute observation as regards aluminium, I would add my voice. I know for a fact that in NVH terms, the XE/XF twins are problematic, but so in addition, (and this is a problem shared with everything JLR build on an aluminium bodyshell), is visibility. Aluminium pillars are by necessity thicker than their steel equivalents, a factor further exacerbated by the ‘fast’ angles of modern windscreens (and in the case of Jaguar’s saloons, rear screens). This not only makes for a decidedly claustrophobia-inducing cabin ambience, but compromises the driver’s ability to safely read the road.

      The other issue with aluminium is that by the time you have bolstered the body structure sufficiently to compensate for the material, you have something which doesn’t weigh appreciably less than a modern well-designed mixed material (but predominantly steel) bodyshell. Not that the body-in-white is necessarily the worst offender in weight terms anyway. Engines, transmissions, drivelines (especially the now de-rigueur 4wd gubbins), those massive wheels, tyres and brakes – the list goes on…

      Richard suggests reducing Jaguar to two models. I’d go further. There is basically nothing Range Rover cannot cover now, so Jaguar ought to concentrate all of its resources upon a specialist 2-seater. Basically a reimagined modern-era version of CX-75. Beautiful, mid-engined (since that is what the market seems to want these days) lightweight and above all, compact and useable. A Jaguar people can fall in love with again. Failing that, just call the whole thing off…

  6. A good article and commentary, illustrating the conundrum that is Jaguar’s place in the modern car marketplace. The only modern Jag I have any familiarity with (in the sense of having been driven around in one) is the XJ; my uncle owned one for a while before repeating his usual trick of merging his car with the scenery. Some clumsy detailing aside, it actually struck me as very much what a modern Jaguar should be and so its demise leaves me with the unpleasant suspicion that there simply isn’t much of a market for the type of car a Jaguar is (leaving aside the question of whether any of their current efforts even fit this mould). Perhaps, as was sadly the case for former greats such as Rover and Lancia, there just isn’t a solution to this problem.

    Goodness, how depressing to have to write that.

    1. There was nothing particularly wrong with the outgoing XJ, apart from slightly dated in car technology and the devisive rear styling. I think the car would have found more homes if Jaguar had stuck to the coupaloon template set by the X250 XF, perhaps with a bit more expression dialled in.

  7. The only constant in the world is change and it simply may be that the change in the “automobile” market will leave Jaguar behind and not in a financial or managerial position to leap up. Of course, much change is not pleasant and the thought of Jaguar ceasing to exist, of the marque that has had made so many splendid cars no longer gracing us with exciting vehicles is sad, indeed.

    I realize the F-Type is built on an “old” platform, and that the market is moving away from vehicles like that, but I think it’s a great car. I almost bought one instead of the 2016 Corvette Z06 I did buy. The cost of ownership was a key factor in that decision.

  8. Speaking of cost-cutting measures, the new Slovakian JLR factory can facilitate the production of more models and I’m sure the locals would be very proud of assembling not just the Defender but also a Jaguar. That is probably not the solution to the problem, but will likely be part of it if they want to keep the brand alive as a mass-market manufacturer. Which I think they should absolutely do – their current line-up may have its faults, but it’s not a complete disaster either, both the XE and XF could be developed into more appealing cars with small evolutionary steps.

  9. Great article except the author fails to understand the change in buyer’s taste over the years. Knocking Ford and incorrectly praising Ralph Speth when failing to understand that under Ford ownership, peak SUV craze didn’t happen. Speth had the benefit of a booming Chinese market and a booming SUV crazed world.

    1. Bill, thanks for stopping by. However, given that you appear to have read a completely different article to the one I have written above, I’m forced to accept both your criticism and praise with equal ambivalence. Not only have I failed to praise Dr. Speth at any point in the text above, I simply pointed out that Ford’s strategy for Jaguar was a failure – hardly a newsworthy stance, since this is now a widely accepted reading of the situation.

      Furthermore, Ford management were well aware of the ‘SUV craze’ and proposed a Ford Explorer based Jaguar badged SUV specifically for the US market around the turn of the millennium. Had it not been such a cynically conceived product, it might have been a rather astute product decision, but in the event, wiser council prevailed. Ford gained control of the Land Rover business in 2000. Why? Because of booming SUV sales – especially in the US. From that point, they had the hardware and know-how to produce a suitable SUV for Jaguar had the will and the financial resources been there. They weren’t.

      Ford got a lot of things right with their stewardship of Jaguar, but from a product perspective, they were far too conservative and it was this conservatism (which was maintained by JLR and Dr. Speth as I’ve pointed out on many occasions here) which partly laid the foundations for the Jaguar brand’s troubles today.

  10. As someone who worked for JLR up to May this year, your article reflects almost perfectly how I felt about the direction of the Jaguar brand.

    1. Thanks for your comment Scott. I’m genuinely sorry to hear that.

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