Jaguar plans return to profitability with new high-end models

Jaguar plans return to profitability with new high-end models

Jaguar plans return to profitability with new high-end models

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Since announcing the completion of the sale of Jaguar and Land Rover to Tata, managers have been talking about pushing the brands upmarket so they can make more profit per vehicle rather than selling them in larger quantities. Such a move is important because Jaguar’s yearly sales sit at around 60,000 units, a mere fraction of German rivals BMW and Mercedes, both of whom are well above 1m cars a year.

The low sales has resulted in lower budgets to develop new models and being forced to use older powertrain technology. The company's new XF is a prime example - it uses a revised S-type chassis and diesel engines that are not as economical or powerful as those found in rival premium cars.

The savior could come in the unlikely form of Tata, the company made famous around the world for its $2,500 car but whose boss now believes that investment into Jaguar and Land Rover (JLR) is the only way for the companies to compete with the best.

The new CEO of JLR is David Smith, who plans to move the brands upmarket by targeting consumers in emerging economies that are willing to spend more than £100,000 on their choice of transport. In an interview with the Financial Times, Smith said the brands could be taken “a lot further up the market,” and that “both Jaguar and Land Rover, through the Range Rover brand, should be able to produce very credible products to appeal to people in those markets.”

The £100,000 figure is a price that will put Jaguar in close contention with both Aston Martin and Bentley, both companies that have arguably more bankable brand names, but are limited by the platforms and engines available to them. By carving out specific niches, there’s no reason Jaguar couldn’t also have a piece of the pie.

Though he wasn’t willing to divulge details of new models in the pipeline, rumors about a new Jaguar F-type coupe have been rife, as well as plans for a super-sports sedan to compete with the upcoming Porsche Panamera and Aston Martin Rapide.

On the Land Rover side, it’s expected they will introduce a production version of their LRX concept in three and five door formats in the next two years, as well as a super-luxury version of the Range Rover Sport to compete with Porsche’s Cayenne, which has essentially cornered the market on luxury SUVs.

In the shorter term, Jaguar will introduce a high-performance version of its XF sedan in the form of the XF-R, and we’ll see a wagon version of it as well. Both the Range Rover Sport and the Jaguar XK Coupe/Cabrio are also due for mid-life facelifts as well.

The good news for JLR is that it already has a dealership structure in place that's able to deliver top-notch customer service, as evidenced by its number one ranking in the J.D. Power’s Customer Service Index Study. With the right products to match the great dealership experience, JLR could be well positioned for a Fiat-like revival.
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