Clive Goldthorp
Jaguar Land Rover Automotive plc (JLR) appears to be on something of a roll at the moment – retail sales during Q3 (the three months to 31 December, 2013) of the current 2013/14 Fiscal Year increased 27 per cent year on year to 112,172 vehicles which generated revenues of £5.328bn and an operating profit up 79.2 per cent year on year to £955m while, in last month’s issue, CAR Magazine majored on Jaguar with articles explaining why the marque’s much-anticipated Audi A4, BMW 3 Series and Mercedes-Benz C-Class rival ‘will redefine sports saloons’ and revealing details of six other new Jaguars which are to be launched between now and 2020.
Jaguar chose this week’s Geneva Motor Show to announce that the production version of what was previously codenamed the X760 will be called the XE and that the car will be the first to use JLR’s new Ingenium engines in four-cylinder, 2.0-litre petrol and diesel form. The new engine family will be built in the company’s £500m plus, 775,000sq ft UK Engine Manufacturing Centre which is located next to the M54 on the i54 South Staffordshire Business Park near Wolverhampton and which is scheduled to become fully operational early next year. However, in addition to that investment, JLR is also investing £1.5bn in the company’s existing Solihull facility where the Jaguar XE will be built – all in all, the company expects to create around 1700 jobs as a result of these investments.
Jaguar Land Rover’s global retail sales increased by 19 per cent in 2013 to 425,006 units but, while Land Rover accounted for 348,338 vehicles, Jaguar sales totalled 76,668 vehicles. Admittedly, that represented a 42 per cent increase over the figure for 2012 but, as CAR Magazine’s Editor, Phil McNamara, pointed out ‘BMW sells twice as many cars in the UK alone [and] the Jaguar brand remains loss-making.’ Interestingly, in researching his article, McNamara contacted high-profile Automotive Industry Analyst Max Warburton of Bernstein Research in Singapore – Warburton quoted ‘a JLR executive’ as telling him ‘Jaguar is not viable at 60,000 units. This is Jaguar’s last chance – if X760 fails, that will probably be the end for the brand.’
Tata Motors Limited, Jaguar Land Rover’s parent company, reportedly intends to invest circa. £2bn per annum in JLR through to 2017 and, if the XE succeeds, Jaguar could be selling 250,000 cars a year by 2018 with total Jaguar and Land Rover sales reaching 800.000. However, when Max Warburton concluded that ‘JLR is embarking on perhaps the most rapid and ambitious growth plan ever attempted by an OEM,’ he was clearly implying that this is a high-risk strategy… Indeed, close scrutiny of Tata Motors’ recent sales decline in the company’s domestic Indian market serves to underline that assessment.
Jaguar Land Rover’s encouraging performance in Q3 of the 2013/14 Fiscal Year resulted in Tata Motors posting a net income for the period of 48.1bn rupees ($771m) – almost triple the 16.3bn rupee figure from the same quarter in the preceding Fiscal Year. That profit may have exceeded the 35.1bn rupee median of 38 Analysts’ estimates compiled by Bloomberg but hides the fact that the company’s vehicle sales in India declined dramatically in the nine months to the end of December, 2013 – passenger vehicle sales fell 37 per cent while truck sales dropped 25 per cent in the same period. The former figure represented the biggest decline in sales recorded by any of the OEMs reporting monthly figures to the Society of Indian Automobile Manufacturers. The downward trend has continued into this year with India’s Economic Times last week reporting that Tata Motors posted a 35.56 per cent decline in total vehicle sales to 39,951 units in February (down from 61,998 vehicles in the same month last year) although passenger vehicle sales rose to 11,325 units in February, up from 10,613 units a year earlier.
Tata Motors’ problems in India must, at least in part, be attributable to the Tata Nano’s continuing failure to achieve anything like the sales of 250,000 units a year which the company originally envisaged. The Nano, which was widely touted as the world’s cheapest car, had a troubled gestation – in October 2008 Tata Motors was forced to abandon a new plant at Singur in the eastern state of West Bengal when faced with violent protests and political opposition over the acquisition of the 997 acres of farmland on which the factory was being built. The new plant was reportedly 85 per cent complete and represented an investment of 15m rupees ($343m) but the company nevertheless opted to build a second new factory for the Nano at Sanand in the western state of Gujarat.
The launch of the Nano was, as a consequence, delayed by six months while production of the car was temporarily transferred to one of the company’s existing plants – the first Nano did not roll of the production line at Sanand until June, 2010. However, even at the time of the launch, Analysts predicted that the car would not make a profit for six years – Vaishali Jajoo, an Automotive Analyst at Mumbai’s Angel Broking, was quoted by BBC News as saying: ‘Even if Tata can sell 250,000 models a year, it will add only 3% to the firm’s revenues. That doesn’t make a significant difference to the top line and, for the bottom line, it will take five to six years to break even.’
Tata Motors’ plant at Sanand has an installed capacity of 250,000 units with the potential to be expanded by another 120,000 and has the capability to produce one Nano a minute but was last year down to one shift for three or four days a week – plant utilisation was at less than 20 per cent. Indeed, total Nano sales for the period from the car’s commercial launch in March, 2009 until October, 2013 stood at 241,000 cars while, based on data from the Society of Indian Automobile Manufacturers, Nano sales declined 71.9% on a year-on-year basis to 13,828 units in the nine months of the current 2013/14 Fiscal Year to 31 December, 2013.
Tata Motors has, according to the Economic Times, conducted a feasibility study into producing the ‘XO’, a new B-segment car based on a thoroughly updated version of the Tata Vista’s X1 platform, at Sanand ‘to offset low Nano numbers’ while, in an interview on CNBC’s Managing Asia last November, Tata Group Chairman Emeritus, Ratan Tata, admitted that Tata Motors had made a mistake in the marketing and positioning of the Nano, saying: ‘It became termed as a cheapest car by the public and, I am sorry to say, by ourselves, not by me, but the company when it was marketing it. I think that is unfortunate.’
The company has since sought to re-position the Nano as a ‘smart city car’ with last January’s launch of the Nano Twist – Tata Motors then Managing Director, Karl Slym, told the Economic Times that ‘with the new Nano Twist, and the [CNG-fuelled] Nano eMax a few months back, we have begun this journey of a Nano portfolio that stands true to its brand essence: a youthful, exciting car offering great value but [which], at the same time, builds in a different set of features to suit differing customer needs.’
However, while Ratan Tata suggested that the ‘Nano could also be marketed as a changed product in Europe’ in the interview referred to above, any plans which Tata Motors might have had for a European launch may well have been compromised by the results of a crash test on the Nano conducted by the German ADAC last December and which were published by Global NCAP at the end of January. AROnline’s readers can watch Global NCAP’s video of that crash test below but, suffice to say, the Nano received a zero-star adult protection rating and failed to meet even the most basic UN safety requirements – crucially, the Nano does not have any airbags.
Tragically, just four days before Global NCAP published the Nano’s crash test results, Tata Motors’ Managing Director, Karl Slym, who was in Bangkok to attend a board meeting of Tata Motors Thailand, fell to his death from the 22nd floor of the city’s Shangri-La Hotel. The Thai Police claimed that Slym, who was accompanied by his wife, had been experiencing marital problems and suspected that he had committed suicide.
Derby-born Slym, 51, was reportedly handpicked for the role of Managing Director at Tata Motors by Ratan Tata and appointed in August, 2012 – he had previously headed General Motors’ Indian operations from 2007 but then became Executive Vice President of SAIC GM Wuling Automobile Company Limited, a GM joint venture in China which produces Wuling micro-vans and Baojun entry-level cars, in January, 2012. Cyrus Mistry, Tata Group’s Chairman, said of Slym: ‘Karl was very passionate about the change he was bringing in the last 15 months, we must ensure that the biggest gift we can give him right now is to continue to do our best and strive hard to take his vision forward.’
Mistry, who is also Non-Executive Chairman of Tata Motors, moved rapidly to establish a Corporate Steering Committee (CSC) which will, under his leadership, oversee strategy and ‘key aspects’ of operations at Tata Motors – the CSC’s main task will, no doubt, be to complete the implementation of the company’s Horizonext strategy which Karl Slym had announced in June, 2013 and which has four pillars:
- Intense product focus
- Focus on world-class manufacturing practices
- Enriched customer purchase experience
- Consistent quality of service
Indeed, any observers doubting Tata Motors’ commitment to Horizonext following Karl Slym’s untimely death, needed to look no further than the company’s stand at India’s Auto Expo 2014 which opened near New Delhi on 7 February – as Autocar India reported, the company displayed two production versions of the B-segment competitor which was originally referred to as the ‘XO’: the Bolt hatchback and the Zest saloon, which are powered by the company’s new four-cylinder Revotron 1.2-litre, turbocharged petrol engine and a Fiat-sourced 1.3-litre Multijet diesel, are both scheduled to go on sale in the second half of this year.
However, according to Autocar India, ‘Tata Motors’ big reveal at the Auto Expo’ was the Nexon Concept – a B-segment crossover which is also based on the updated X1 platform and which will compete against the likes of the Ford EcoSport following the expected launch of the production version sometime in the next two years. The Nano Twist Active Concept was also unveiled and, whilst that was the first Nano to feature an opening tailgate, airbags had not apparently been included in the updated specifications. The Bolt, Zest and Nexon Concept are all on display at the Geneva Motor Show this week and, as recently reported by Autocar here in the UK, the first two models will be sold through Tata’s European Dealer Network centred around Italy, Spain and Turkey before the end of the year.
The Revotron 1.2 T engine is the first of a series which will power the four to eight new models to be based on Tata Motors’ Advanced Modular Product (AMP) platform. The AMP, which is also called X4 internally, is being jointly developed by the company’s Coventry-based European Technical Centre and the Engineering Research Centre at Pune in India – the first car to utilise the platform should be launched by 2016.
Jaguar Land Rover has a Joint Venture with Chinese OEM Chery Automobile Company Limited which will see Chinese production of some JLR models commencing in 2015 and, as the Economic Times reported this week, Tata Motors and Chery Auto are currently engaged in talks ‘which may include sharing of vehicle platforms, getting access to the market in China for Tata Motors and even helping Chery to enter India.’ The Economic Times specifically refers to the development of the X4 platform and, given the context, implies that may be shared with Chery Auto – commercial logic suggests that Tata Motors’ poor domestic market sales performance must be putting pressure on the company’s ability to fund such ongoing future investment and so further cooperation with the Chinese OEM surely merits the CSC’s close consideration.
CAR Magazine not only revealed details of the Jaguar XE but also claimed that the X761, a smaller, production version of the C-X17 Concept SUV shown at last year’s Paris Motor Show, was expected to be confirmed for production early next year before going on sale in 2016. A further five new models were predicted for launch during the remainder of the decade:
- 2016 – The XF replacement which is codenamed X260
- 2017 – The XK replacement which may grow in size and become a competitor for the likes of the Bentley Continental GT
- 2018 – The XJ replacement which is codenamed X360
- 2019 – A new XJ Coupe to rival the just-launched Mercedes-Benz S-Class Coupe and which is said to hark ‘back to the XJ6/12 C and to the early XJS’
- 2020 – A new supermini which CAR Magazine reckons is ‘inevitable’ as ‘the EU emissions average of 95g/km looms in 2020.’
However, the sustainability of the 1,700 jobs which JLR expects to create and the company’s ability to generate sufficient revenue to cover the design and engineering costs which will be incurred in bringing all seven new Jaguar models to production may well not only depend on the success or otherwise of the new Jaguar XE but also on parent company Tata Motors’ capacity to underwrite the cost of that continuing capital investment for the foreseeable future – in the circumstances outlined above, that is by no means a certainty. No wonder, then, that Analyst Max Warburton’s contact at JLR implicitly thought the two companies were effectively ‘betting the farm’ on the Jaguar XE…
He owned an 06/06 MG TF 135 and then a 15/64 MG3 Style for much of the time he has been associated with AROnline - more recently, though, he has re-kindled a long-standing Alfa Romeo affair with an 18/68 Giulia Veloce 280...
Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing and other projects, but remains active behind the scenes sub-editing content on a regular basis.
- Concepts and prototypes : MG ZT-T 4WD – what might have been… - 6 December 2017
- History : Brand ownership - 21 November 2016
- Blog : Will MG’s slow boat to Europe hit Hinkley Point or the Brexit rock? - 29 August 2016
Those who can, do ; those who can’t,teach ; those who can’t do or teach, become analysts!
well that is interesting I wrongly thought Jaguar was doing “well”. I cant help thinking a JLR built small to medium badge engineered Rover could triple sales again (lower spec trim) and different body panels to the Jag. I think if the Rover baby was built by JLR that the world would forgive any previous traits (weather they are deserved or not) it is almost 10 years on….. Alex
More seriously, the question of whether Jaguar is profitable or not in its present state is one which is difficult to answer. First, it has to be determined what precisely jaguar now is. Is it a car producer, or is its primary role one of engine production for both Jaguar and LR products? Certainly, the major investment is in the latter function, and thus transfer pricing will determine whether it is “profitable” . It is this cross-fertilisation between group members, and now often between different groups with shared platforms or engines or gearboxes etc , which makes profitability of individual entities very difficult to establish
Stick an Evoque stlye front on the Jagette give a different back end treatment, cost down on the trim, and call it a Rover. alex
I think we are desperately looking for something negative to offset all the good news that has come out of JLR recently. Well we are British after all. Tata Motors is just one component of Tata Group – a $100bn turnover Global company.To put that in context, that’s almost as big as the UK deficit we worry about so much. If issues at Tata motors where such a big deal I hardly think we would be seeing the investment in Solihull to produce the XE or plants in Saudi Arabia and Brazil. This is one of the benefits of JLR being owned by a non British or US Company. Faced with a poor set of results they would think about nothing except next years share dividends, shut up shop and run for the hills. We are dealing with rather more sophisticated and clever business people here.
Paul @ 5 above,
I fully understand your point but was merely attempting to inject a degree of objectivity into all the current discussions about the future of Jaguar Land Rover – Tata Motors’ situation in India does not really seem to have received that much coverage in the UK-based motoring media. Hopefully, those discussions might now be a tad more informed…
Jaguar is being “keeping alive” for years. If there was no LandRover brand it was already finished.
X-type production was never profitable. It seems to be a sport these days to make cars for the upper class. With the Rover branch you can also reach the middle class. Rover is a better match for Audi and BMW in the middle class. Jaguar is more a rival for Maserati, Mercedes S, Audi A8 and BMW 7 series, upper class player.
Trying to imitate German rivals who want to cover the whole business with one brand won’t work for a small manufacturer.
Are they blind at JLR or what? If numbers tell you clearly what is the most popular brand you have to invest in that and not in what seems to be “fun”.
Seems to be same mistake MGrover did with investing a lot of money in MG SV and V8 models instead a R45 replacement.
Solely for the image…
In any case, whatever they do, I hope they succeed and I’m not right eventually …
Reintroducing Rover as a bridge between Jaguar and Tata cars and producing them in the UK, India and indeed China is the most logical step to my mind.
What Tosh, because of the intertwined nature of Jaguar and Land Rover (hence the double sale to TATA)saying that Jaguar is loss making, is impossible, as Jaguar themselves never release independent figures, and as I have been advised many times, the XF and XJ both make very handsome profits, the XK is now canned, so the losses on that model will no longer be a worry and the F-Type, once all models are released will also bring in lots of nice profits.
Yes Land Rover sell more cars than Jaguar, but they do have 6 distinct products, each with there own variations, Jag now has three, XF, XJ and F-Type, for these “analysts” TO MAKE SWEEPING STATEMENTS, that Jaguar will be un-viable and its the last chance, shows how out of touch they are, and I very much doubt ANYONE inside Jaguar would say anything other than positive comments, so I will ignore his stupid comments.
ROVER will not be brought back, regardless of how many people continue to say it, the brand has gone, it is a great shame, they produced some stunning cars over the decades, but alas no more.
JLR is and has been a major success, why cant we accept that and enjoy the products that come out of the design studio’s, why is that any nice story about a British company has to be slated, slagged off or incorrect info re-produced, it is great to see expansion, sales increases, more profits, and more jobs, but hey, lets just find the negative and hone in on that shall we ?
JagBoy @ 8 above,
Just for the record, I devoted pretty much two solid days to researching and writing the above article this week…
I take your point that as, Jaguar Land Rover Automotive plc is now a single legal entity, one cannot conclusively say whether or not Jaguar is loss-making. However, if you re-read the piece, you will see that CAR Magazine’s Editor, Phil McNamara, made that statement and not me – I surmise that he is probably rather better informed than either of us…
You are, of course, perfectly entitled to ignore the comments made by Max Warburton of Bernstein Research but he appears to be highly regarded by many of the key players within the global Automotive Industry and is often asked to provide commentary on the sector by the likes of Automotive News, Bloomberg and Forbes. Here’s Warburton’s current profile on Institutional Investor’s website.
I am not an expert on how the finances of a major car maker are assessed, but I presume JLR is a single company making a variety of products? Do Jaguar and Land Rover exist as separate companies within the Tata empire?
What I’m getting at is that a company like, say, Tesco sell a variety of products but their profits are basically one big number. If Jagiar sales are ‘loss-making’, are they not offset within the company’s books by Land Rover profits? I appreciate they cannot keep propping up a brand that draws in less money than it costs to build its cars, but I thought that was the whole point of economies of scale; the big earners help to subsidise the smaller ones.
Clive, it seems that things are rather jLR as opposed to JLR at present! The XE could change things dramatically but the again it may not. The end of Jaguar does indeed seem possible.
Not at all surprised that you spent two days researching, writing!!
Land Rover, however, is very much the ‘in brand’. As Alex suggests @ 2 and 4 could Rover therefore make a comeback, producing smaller, cheaper cars as part of the Land Rover brand. I’m sure many of today’s younger customers would buy into this, associating Rover with today’s Land Rover and not 45s and 25s of a decade ago.
Quote: “Analyst Max Warburton of Bernstein Research in Singapore – Warburton quoted ‘a JLR executive’ as telling him ‘Jaguar is not viable at 60,000 units. This is Jaguar’s last chance – if X760 fails, that will probably be the end for the brand.”
Talk about the so-called experts trying to put a promising company down and also suggesting that if the XE fails to enable the company to deliver 60,000 units a year, then it is likely curtains for the Jaguar brand.
Does Mr Warburton (and particularly this JLR executive) not realise that both companies are going through a massive restructuring programme as the Five Year Business plan inherited from previous owner Ford is now completed and the company is now in the final stage of delivery a new range of petrol and diesel engines, not to mention a new modular platform? All of which is the first phase in an ambitious business plan funded by new owner Tata Motors. JLR has already reduced its cost base quite significantly in the last four years and this forthcoming new engines range and modular platform, to be used by both companies, will aid this process further. Achieving sales of 60,000 units a year for Jaguar Cars should easily be manageable when you simply aggregate production figures for all their models.
Turning Jaguar into a bigger seller through new model ranges and expanding the current line-up was never going to be a five minute job – just look how long it look Audi and BMW, for example, to get to the level they are at today – it took years not months. This attitude to making Jaguar into what amounts as a ‘boom or bust’ brand in the medium term only not only brings back painful reminders of Ford’s ambitions for the brand in the late 1990s, but also the usual expectation of the 1950’s British motor industry when it still had predominantly private and corporate shareholders to answer to. This attitude for Jaguar won’t work; any desire to achieve the higher production output expectation will take time and careful nurturing based on many factors.
If, as this JLR executive quoted, “Jaguar does not succeed with the X760”, then I hardly think it will be the end for the Jaguar marque. Discontinue Jaguar and suddenly Land Rover looks a very vulnerable company, despite its current success, as there are obvious strategic limitations with its product line-up which means it does not cover the whole SUV market adequately. Kill off Jaguar and bring back the Rover brand instead? Hardly. You still have to invest heavily in new car designs based on new or tweaked platforms, bodies and both primary and secondary trim. There will also be the huge task of resurrecting what is currently a dormant brand and trying to build up its image to an aspirational level – this alone will take at least a decade and require huge ongoing financial commitment to potentially succeed. This latter route is only deliverable from working with any success already achieved from having rejuvenated the brand fortunes of Jaguar, not as a convenient substitute.
As for the JLR executive making this rather brash comment about his employer to a so-called Motor industry analyst, who has willingly divulged it to a wider audience, you must feel rather pleased to potentially undermine a lot of the work your colleagues have already done to transform the fortunes of JLR, to enable it to have an encouraging future. If I was you, Mr/Ms “JLR executive”, I would hang my head in shame at potentially stabbing my colleagues and their efforts in the back and go and collect my P45…
An un-named JLR executive i.e. someone who can’t be contradicted or even proven to exist – a cynic would say it had been made up.
Anyway, I thought they were increasing the number of models but reducing the number of basic platforms – potentially a very profitable strategy!
As noted above I think JLR reports as a single entity with no distinction between the brands. An advantage surely of Jaguar and Landrover sharing key components such as Engines and shortly whole platforms means that the Jaguar brand can benefit from the economies of scale and survive at low volumes? Thats before you take account of shared R&D facilities and plants as Solihull gears up to build Jaguars as well as Landrovers. Again, the point about the company not being in Anglo-saxon ownership is underlined by its response to Jaguars current volumes. It isnt considering pulling the plug or letting the brand wither, it is throwing all its got into completely new high volume products like the XE and SUV/Crossover. Forget what the CAR person says. Remember he will be a Journalist first and someone with an interest in motoring a long way second. His views are as relevant as a someone who writes the Weather Headlines for the Daily Express.
David 3500 @ 12 above,
Just a quick point of information in response to the second paragraph of your post – according to CAR Magazine, ‘if the X760 [XE] plan comes off, Jaguar could be selling 250,000 cars a year by 2018, with the group as a whole selling 800.000.’
Admittedly, we have no way of knowing whether those figures came from a credible source within Jaguar Land Rover Automotive plc (JLR) or from elsewhere but, if the former, then the inference to be drawn must presumably be that the company’s current Business Plan and the underlying financials are based on Jaguar sales of 250,000 units per annum and not just 60,000 units per annum.
You make a valid point when you say ‘just look how long it [took] Audi and BMW, for example, to get to the level they are at today – it took years not months.’ However, the end of 2018 is now less than five years away – that is a relatively short period of time in which to increase JLR’s annual sales to almost double that of last year’s 425,006 units.
My lengthy and, hopefully thorough, research this week into Tata Motors’ current performance in India has, rightly or wrongly, left me with some concerns that JLR’s ambitious expansion plans for the Jaguar marque may not be as robust as at first appears.
However, AROnline’s readers should be in no doubt that everyone here fervently hopes those expansion plans will succeed.
I think nobody would deny that Jaguar’s recent volumes are too small. However, that is exactly the reason they are producing the XE/X760, a car that will fit in to what is by far the biggest sector of the prestige car market. Rather than it being a question of apocalyptic predictions for the brand if it fails, it should be recognised as the necessary medicine to cure the problem of Jaguar’s low volumes.
Whilst the requisite additional 170,000 or so the model and related ones will add to the total volume of Jaguar sales sounds like a big number Jaguar are in fact striving for a far smaller slice of the pie than BMW, Audi and Mercedes get. This is especially true if you consider that the X760 platform will spawn an Estate, Coupe, Convertible and Crossover as well as the Saloon. For point of comparison BMW can shift annually 400-500,000 3-Series models of various bodystyles and 100-150,000 X3s. Added to this that even with the existing ranges Jaguar’s volumes are expanding year on year (last year’s volumes didn’t have a full year of the F-TYpe AFAIK or the F-Type Coupe which is imminent) then suddenly the additional 170,000 to make 250,000 sales doesn’t seem like such a tall order.
As a last point, considering everything that Jaguar have managed in the past few years I ask the question that whilst some of their aims are high would you bet against them?
Sandie @ 16 above,
Well, as AROnline’s resident – if only occasional – punter, I would prefer to reserve judgment on whether to bet for or against Jaguar’s sales reaching 250,000 units per annum by the end of 2018.
Hopefully, at least in the short term, my money will be better ‘invested’ during next week’s Cheltenham Festival National Hunt meeting… 🙂
I wonder what will happen when Ratan Tata passes on control of Tata – will it become more corporate and “safe” lacking his charisma and drive? I am sorry that the Nano missed its market – it could have been an iconic modern Ford Model T bringing cars to a huge market used to zilch-NCAP rated motorcycles/mopeds. I hope they don’t do a British Leyland and let the truck/bus division miss out on investment/development. I still think there is room for a Rover brand – a quality/well engineered fundamentally British car range physically too small to stretch Jaguar and Land Rover branding down into – there are a lot of ex-Rover people helping to radically overhaul Tata’s car range which will not just be built/sold in India. I am still concerned that Chery are a danger given their previous IPR history. Finally, “analysts” may fail to recognise JLR’s ability to innovate such that its fixed cost/overhead base is a lot smaller than more conventional multinational vehicle manufacturers?
I wish people would stop wishing for the return of Rover.
It’s dead and smells worse than a fisherman’s outhouse in high summer.
Hence why no-one wants the expense of the truckload after truckload of potpourri required in a vain attempt to remove the stench of failure from the brand and what it became.
@19
I’m convinced that the Rover brand will return, but at the moment the focus is on the Jaguar brand and ensuring that the new models generate the projected volumes to make its operations profitable.
Rover was a company with a loyal customer base, excellent engineering and design staff, and a committed workforce that should have flourished under BMW, but we all know what happened there.
With an established Land Rover dealer network, small/medium Rovers sharing underpinnings with Jaguar models could be sold alongside Land Rovers.
Dave @ 11 above,
I am pleased that at least some of AROnline’s readers clearly understand the amount of time and effort which goes into the writing of our more in depth articles.
Ratan Tata’s admission that Tata Motors had made a mistake in the marketing and positioning of the Nano and the subsequent re-positioning of the model as a ‘smart city car’ might, just might, signal a move upmarket and that may, in turn, prompt the company to re-evaluate the case for reviving the Rover marque at some point in the future. I wonder whether any assessment has been made of the impact which the Nano’s relative failure has had on the Tata brand’s image at home and abroad…
My own view is that there are currently two potential opportunities for a Rover revival: the supermini which CAR Magazine predicted for launch in 2020 and the new brand which the JLR/Chery Auto JV in China, Chery Jaguar Land Rover Automotive Company Limited (CJLR), is obliged to launch under the terms of the company’s licence from the Chinese Government.
My guess is that CJLR’s new model family may well be based on Tata Motors’ forthcoming AMP/X4 platform – if CJLR has plans to export those new models at some point in the future, then using the Rover badge might be an option. After all, if as has been rumoured SAIC Motor replaces Roewe with the Shanghai marque in China, that would remove a potential IPR issue.
However, quite where CJLR’s new brand will be positioned in relation to both Chery Auto’s own model range and that of the latter’s other JV, Qoros Automotive Company Limited, remains to be seen…
Anyway, here’s a final thought: is Qoros the new Rover? Actually, that idea might be worth exploring in a separate article but, in the meantime, anyone interested can find out more via this link to the company’s website.
@ Paul Stringer – Comment 19:
Quote: “Rover was a company with a loyal customer base, excellent engineering and design staff, and a committed workforce that should have flourished under BMW, but we all know what happened there.
With an established Land Rover dealer network, small/medium Rovers sharing underpinnings with Jaguar models could be sold alongside Land Rovers.”
I like your summary on Rover (the company).
I might be accused of sounding like a stuck record based on my previous comments about the Rover brand on this website in the past, but many of the observers who are very derogatory about the Rover name are judging it purely on how it is perceived in the Home Market. In quite a few export territories Rover commanded a more aspirational perception that was well liked for its timeless, elegant designs, innovative engineering, sense of wellbeing and link to heritage, whether subtle or more abundant.
This reversal of brand perception is certainly no different to what other brands have experienced. For example, Saab and Volvo are perceived as quite sporting with a premium emphasis on their appeal in the UK. In Sweden however, both marques are seen as more working class and certainly not aspirational compared to how they are perceived in the UK, North America or Japan, to name but a few territories.
Clearly no car company can go by the perceptions (informed or ignorant) of just one territory to make an informed decision on what they are able/not able to do with an active or dormant brand.
One further point – there is a need to distinguish between the brand (Rover) and the company (Rover Company Ltd, Rover Cars, Rover Group, MG Rover Group…); something which most journalists are too lazy to do. Clearly any negative news about ‘Rover’ (the company) in the past would have intrinsically had a negative impact on the brand (Rover) and associated sales of the models it represented.
David 3500 @ 23 above,
Yes, that’s a really valid point about the need to make a distinction between the successive Rover companies and the marque – if you ever find me to be guilty of failing to make that distinction in future, please do not hesitate to point the finger! 🙂
Stop obsessing about Rover, at the end of its life it was not producing the P6 or P5, but past it cars based on Honda platforms. Rover 75 excepted.
That placed Rover on the Ford level brand wise, not enough of a premium there.
As for Jaguar, its problem is volume. BMW etc have shown how this can be turned around, and JLR have done this to a degree. Land Rovers and Jaguars are from the same company after all. Component sharing will reduce costs even more.
It just shows how important the XE will be. Get it right and Jaguar gets the volume it needs. Get it wrong and Jaguar is in trouble.
I suppose if BMW made a loss on the 5 series or something, this would be overlooked, but because it is a former British Leyland company, some fault has to be found. TBH I think BMWs are competely overrated, using rear wheel drive even on small cars is like going back to the seventies, and they’re dangerous in the wet. Jaguar has come on leaps and bounds since the dark days of the XJ 40 and the marque topped JD Power last year.
of course losses are going to be made, investment in and the money made per car is going to be a gaping chasm.
You have to speculate to accumulate. One worry is the TATA group as an whole, the Indian economy is in a poor state and the country lacks the infrastructure to support any outside investment.
Stopping buying BMW products that folk are told are they things people want would also be helpful.
What BMW has a soul or elegance of a Jaguar?
Clive, If you care to re read MY post, i never said it was you, i quoted the analyst “for these “analysts” TO MAKE SWEEPING STATEMENTS, that Jaguar will be un-viable and its the last chance”, I get my info direct from source, and have done for some considerable time, not just over two days.
However I did read your post and enjoyed it, I don’t enjoy the constant negativity to anything that’s successful, via the comments afterwards, where he majority of my pith is aimed, and will continue to voice my opinion if i feel that negativity is not warranted or justified, just as others will continue to post there opinions.
Analysts are a poor persons Journalist, they make sweeping statements based on what, what they think, never has anyone at Jaguar stated that Jaguar loses money, or that it is on its last legs as quoted in your piece, so i take it that this person is just making sweeping statements to make a name for themselves without actually knowing the facts.
I like the idea of Qoros, and have spoken to them a few times via the UK arm, whether they will be seen as a faux Rover, I am not so sure, the cars look good, and well screwed together (from reports I have read) and seem well fit for purpose, its the same old Chinese link that will ultimately be its success or downfall, maybe that’s why Israel Corp are 50% owners, to divert away any notions of cheap and tacky, which this brand, is definately not.
JLR has got to do some serious thinking over the next 2 years, the EU2020 means that the corporate figure of CO2 HAS to be 95g/km or less, the NANO will help, but JLR has got to go some way to achieving this, the new Ingeniumm engines will, the base engines will be a bit lower than 99g/km, and will be available in a number of JLR products, the XE will be the first all new car to have this engine, along with alloy bodywork, should help keep things low.
Jag are going in a new direction, gone is the XK, and incomes the F-Type, out goes the big engines in favour of high output turbo’s, and there is rumblings afoot of a smaller Sub XE car, that the dealers do not want (as quoted today by my local dealer principal), whatever happens, it will all be for the good of the company and the buyer.
And just for the record, I support Jaguar, I have paid a £1000 deposit for an XE this very day, and am happy to support a British Company, and its brilliant workforce, this will be our 4th Jag, and we cant wait to get take ownership in June 2015.
I’m not 100% convinced that Rover as a brand name would come back (although it fits neatly with the Rover in Land Rover) but I feel there is a market gap that Tata could fill (assuming that SAIC does not rebadge Roewes) for a range of cars ideally efficiently assembled in the UK with British design flair, engineering skills and innovation.
I’m not convinced about Qoros – with its German design input it could end up trying to occupy the market space filled by Skoda and SEAT.
BTW, talking of Chery, anyone else spotted that they are knocking out modern copies of the Mini Moke in RHD?
Jaguar’s problem at the moment, is that the cars it produces (XJ, XK, XF) are on Jaguar only platforms which aren’t generating anywhere near another sales to be economic. Fortunately, Jaguar and LR can share more platforms going forward, which will help a lot.
I can’t think of any possible place for a Rover at the moment, if they produce a genuinely upmarket small car, why not call it a Jaguar, or if it’s more a MINI Countryman type of thing, it will be a Land Rover. What JLR won’t be producing is a modern day Rover 25, when rivals are producing millions of small cars every year, they’d never be able to compete
JagBoy @ 28 above,
Well, I am glad that you enjoyed the article and am grateful to you for clarifying your original point about Analysts – I had thought that, in view of my concluding paragraph, your remark was directed towards me so please accept my apologies for that misunderstanding.
Anyway, your comments on Qoros Auto are interesting – I was unaware that the company had now established an operation here in the UK. I have found the Qoros Auto UK website but that does not, to me, appear to be an official one and my previous contact has been with the company’s Director of Public Relations Europe/ME, Eric Geers, who is apparently based in Sweden.
Incidentally, in posing the question at Post #22 above, I was thinking more that Qoros might be positioned both here and in the European market where a contemporary, modern Rover may have been rather than as a “faux” Rover.
A final point: you refer to there being “rumblings afoot” of a smaller, sub-XE car which the dealers do not want and refer to a conversation you had with your local Dealer Principal today – I wonder whether your contact and his colleagues would prefer to see such a B/C-segment model or models (to be based on Tata Motors’ AMP/X4 platform?) being launched with the Rover badge and sold through the Land Rover Dealer Network…
@31 Clive
Thought provoking.
Its a good point you make on a Rover Sold through the Land Rover dealership. It would certainly make sense for TATA to concentrate on Steel and the more profitable European car manufacturing they have. TATA automotive are at the budget end of the market which is difficult to make money from. Although I thought the Nano was a good idea in principle, the margins are so small that if it doesn’t achieve the large numbers it doesn’t work and therefore carries risks.
My only issue with a Rover through a Land Rover dealership is, if its something like the Qoros it wont fit with Land Rover. A new Rover would have to be kindred in style and prestige to a Land Rover vehicle to sit with it and all the styling of chrome grill would have to be dropped completely. The question is would that work.
The new EX is of course a very important car to JLR but the hype that this is make or break,… well im not sure about that. Rover went on for years with every critic and analyst saying the latest car was a “make or break” vehicle for them, yet they went on for decades before finally closing its doors and it wasn’t really because of an individual car.
Also JLR have a very strong base to work from and as a group are very successful. If this car doesn’t make the numbers they want, the chances of it bombing are very low. Even if it only achieves 80 thousand a year. That would not be a case for closing the doors, albeit (I think) a loss making vehicle . It would show they have still more potential in a very competitive market with some really good competition. We get lost when looking at JLR because of the freakishly amazing rise of Range Rover sales. Most manufacturers take years to establish a car in a market…..In my humble opinion 🙂
All the German makes have had to follow the money and make SUVs even though their heart is in the saloons, (aka normal cars!!). Jaguar has to follow, even if the other part of the company already makes them. However the logic is that LR make the “off-roader look” SUVs and Jaguar make the “crossovers” This way, the two dealer networks complement each other. I mean to say, even Porsche make an SUV for heavens sake !!
Clive, I will ask, but I already know the answer, it will be, after a long laugh, go away, LR are at present selling everything they can, even though this year so far to date they are down on sales.
With the new Disco family coming on stream and new Defender family also in development, they will have so many models to sell they just wont have room in the showrooms or forecourts.
Now, I would dearly love to see Rover back, and the updated SD1 that was showcased a while ago, albeit, a CGI model, would be a stunning return, and based on the XF floorpan would be a sales no brainer, but how will the distribution and sales handle any new brand, they just could not.
My local dealer is part of a chain thats one of the UK’s best sellers of Jag’s, and from conversations, they are struggling to keep up, with the new XE, this will become very difficult, anything smaller or Roverised would crash the network, his last comment was, “We dont want anything smaller as it would effect the customer service to a point where we would be as bad as Audi or BMW”, apparently they have some staff from these other brands that have passed on some horror stories.
Doesn’t that indicate that their customer service needs to be scaled up to cope with existing planned and future models, rather than looked at as limitation to not meet potential demand for any additional smaller models or brands?
No, Far from it, the size of the majority of dealers means that expanding into further models will cause sites to be over crowded and will cause other models to be ignored, if a showroom currently has room for 6 models which would be three land rover and three range rover, where would the Rover cars be sited.
And as for teh customer service, it is not just the sales, its the service and PDI and so on, the majority of the current dealer network just could not cope with a mass market product like a new Rover, some are struggling with demand now, without adding a low profit, high volume model that any new Rover would ultimately become.
The dealers pride themselves on spending time with customers and giving the sales experience a Jaguar or LR customer deserve, by watering down that experience, by either a new Rover or smaller Jag, would not give the customer teh service they want to give.
I know from past history that buying an MG from a main dealer was one of my worst experiences, followed by Vauxhall and MINI, the best was my Jaguar, they were far and away superior in dealing with customers, and to lose that would be dreadful, especially as they have taken so long to get there.
You can buy a Jaguar anywhere, from your keyboard. You can build it whilst sat on your arse.
Dealer footfall is down from 4.4 people a day to 1.2 in most cases- stats from many dealer principals.
Once the car is bought the salesman disappears- he’s not your mate after all.
If you demand good customer service, shout loud like everyone else does.
no, you are totally wrong, When we bought both our X-Types and XF’s we had not only had regular calls and emails, with updates, and just general enquiries as to “how are you doing”, once the cars were delivered again, we had numerous contacts from the dealer, all the way through to our selling the cars, asking how the car was doing, is everything ok, any issues and so on, initially we were a bit taken aback by this.
However after a while it became the norm, and far from “he’s not your mate” whenever we saw some of the salesmen out and about (in their private time) they always came across and spoke, I have never seen that happen with any other brand, and between the pair of us we have had over 30 cars from numerous brands.
We have never had to “shout” at a Jag dealer, for anything, when I collected my first Jaguar, the passenger seat motor went pop, so we went back to the dealer, he came toddling out to say hello, and was mortified that there was an issue, especially on day one… LOL… he went out of his way to get the replacement part, HE, even drove to Peterborough to get the part required, and, when it was time to get the car in to replace it, they wanted to give me an XJ for the day.
Now we would not turn that down would we, that was fun, but not when we saw the fuel gauge go down in front of our eyes.
If you have not had good service from dealers, that’s just sad, but I can assure you that all the cars purchased from Jaguar dealers has resulted in the best service we have ever had, I could never have said that for an MGR dealer, especially after on collection of my ZS, which Keith has driven, there was found to be some minor damage to the bonnet, the salesman’s resolution, “We will take another bonnet of another car (which had also been sold) and replace it with yours”
Yeah, that really inspires confidence.
Oh yes, and whenever we have been in teh Jag showroom, there has never been less than half a dozen couple s floating about, and always someone going through an order.
Jag and LR are doing great and will continue to do so, in my opinion, they dont need, or cant cope with another brand, not until, at least, they have ALL the new stuff out and about, and thats not for another 6 years, at which point it all starts again.
@38, oh am I? Williams Manchester are a waste of space, forgot they had a XJ we repaired and sent to them for recalibrations. And don’t get me started about Hillendale LR.
Part of my job is dealing with dickheads like this.
Good for you if you have had a good service.
You cant base your experience and just assert that every single Jag dealer is brilliant, they are not.
I have been to numerous Jag dealers, and ALL have been impeccable, i think the reasons you have issues is that you call them “dickheads” if you give attitude like that, its not surprising you get no where.
There are both good and not-so-good Jaguar dealers out there, as is the case with nearly every other marque. My own experience with the Jaguar dealer in Exeter was not one where I felt welcomed. Both a friend and I went in there back in early February and all the staff, including the Sales Manager completely ignored us. Unbeknown to them, my friend walked over the Service desk and settled his huge service bill for his X Type. As someone on a very good salary he then asked someone in the sales department for an F Type brochure, only to be told they were out of stock. The young salesman took down his details although to date, my friend has received nothing in the post.
Make no mistake, the quality of servicing work was very high and they also valeted the car to an impressive standard. But the showroom ambience was far from welcoming or embracing; something that my Father as a company director also experienced on two separate occasions when looking to buy a brand new company car. The result? On both occasions he crossed over the road and bought a brand new BMW 7 Series followed by a Mercedes Benz E Class. You can’t blame him – his money was as good and honest (and as hard-earned) as anyone else’s.
@41.
The reason they are dickheads is because they are dickheads.
I realise now you must be from the provisional wing of the jaguar dealers cant do wrong society.
Sorry.
JagBoy @ 34 above,
I have been more than a tad preoccupied this week with watching the Cheltenham National Hunt Festival on Channel 4 and so have only just seen the post under reply.
Anyway, belated thanks for clarifying your understanding of why the consensus within Jaguar’s Dealer Network is that Jaguar should not compete in the B and/or C-segments.
Your local Jaguar Dealer Principal’s comment that: “We don’t want anything smaller as it would effect the customer service to a point where we would be as bad as Audi or BMW” is interesting.
However, with both Jaguar and Land Rover’s product portfolios set to expand in the coming five to six years, surely the two Dealer Networks will have to invest in both facilities and staff in order to match that?
Anyway, if you do put my original question to your local Jaguar dealership contact, then please do let me have the answer…
I will ask, and to clarify, yes Jag are expanding, and so is LR, but the Rover option as mentioned, and teh mass numbers that would HAVE to be sold to justify the massive expense, would indeed have a detrimental effect on dealers and the customer service that they can offer.
Your suggestion of further investment, or expansion as is the case, in the majority of cases would be very difficult, most dealerships only have smaller sites, that, when Jag was a 3 or 4 car operation, and the same for LR, with a couple more models, would have been acceptable.
Now if JLR would assist in the “up sticks and move” operation it might be viable for dealers, but with the US dealer network currently at major odds with JLR, and the possibility that that may come here, I very much doubt that any cash would be forthcoming for that.
I would dearly love Rover to come back, but, I am a realist, and have come to accept my beloved brand has gone, and with the outlook of a Rover’s return unlikely in the short or medium term, I fear I may not be around when or if it does/should come back.
As an aside, to see what the forum masses think.
With the Daimler brand now nearly a passing brand, what about Rover coming back as the brand of choice for luxury limousines, for the discerning Mayor, MP, Prime Minister or Royal, a Technical tour de force, very modern, very up to date, and very Rover, in the style of a P5b, smoothed over and stretched.
Bentley did it for HRH, with the two Bentley Limousines, (@ £5 million a pop) why not a uber luxury Rover ?
@43, I am sure that when you walk in the door of any showroom, you are welcomed with gritted teeth and a sigh.
Here endeth my thoughts on this post.
@46,No, I am welcomed with exalted majesty, especially when circa several hundred thousands of pounds are spent on parts every year at these dealer groups.
Who exactly will be buying all these Jaguars? Companies are clamping down, introducing caps for CO and mpg returns for their fleets.
I work for a company with one of the largest fleets in the UK, limits are sub 140 for CO and 45 mpg minimum, it applies to all. MD included!
Also the sales incentives for Jaguars, £299 a month, have you noticed all the used Jaguars for sale in the classified ads? Suggests owners are bailing out of their cars
@48, How old are these cars?