With more than 30 years of advertising under my belt, I’m no stranger to spin. Once in a while, I’m impressed by the gumption of some spinmeisters. This is one of those times.
So I read at Reuters that Jaguar is “ready to leap back to pre-crisis sales.” Reuters quotes Jaguar Land Rover’s head David Smith, who said: “In the past, Jaguar built more than 100,000 vehicles per year. We can return to such levels once the crisis is over.” Reuters says Smith gave those optimistic remarks to Germany’s Wirtschaftswoche.
So over to Wirtschaftswoche I go. At first, I think I found the wrong article.
“Jaguar Land Rover Sales Sink 30 Percent” says the headline in the Wirtschaftswoche. “In 2009, we sold 260,000 units, 65,000 of those Jaguars,” Smith is quoted as saying. Down 30 percent for the year. Well, the new XJ should make up for that, there are “already 3000 pre-orders.”
“We are faced with big challenges in the cost department,” says Smith. “Challenges” are manager-speak for problems. “We want to reduce the two factories in the Midlands to one,” he says. Uh-oh, he’s thinking about moving production to low-cost countries. Not to India, as many suspect, but maybe to China. “Without any redundancies” in the U.K., of course.
Then, the operative sentence: “If we make the right investments at the right times, and if we maximize our strengths, then we should be able to realize strong growth.”
That’s a lot of ifs.
As much as American brands are lambasted for quality, Ford’s biggest contribution to Jaguar was improving the quality of it’s products. Jaguar got new vehicle investment that they never would have seen otherwise. If Tata doesn’t make the same kind of investment…continuing the improvement in quality and supporting new models, Jaguar is finished. Cost cutting alone won’t save Jaguar.
TTAC is ignoring one really rather significant fact. How many cars is Land Rover currently exporting to China, despite the huge import taxes put on their cars?? I think TTAC’s author may fall off his chair when he see’s just how high the number is. I did! JLR wants a car factory in China for 1 reason and 1 reason alone. They want to skip those hideous taxes and become China’s number 1 premium auto builder. And that’s not a pipe dream in China. The fact is the Chinese love their SUV’s and Land Rover is in pole positionof all the premium car makers to capitilise from this. That alone will make Ford’s decision to sell them look pretty damn awfull.
Closing a car factory in the Midlands makes sense. Making an even bigger range of SUV’s and Jag’s makes even more sense…..
They need to move manufacturing of lower rung models out of England all together (the only times in recent history that JLR has been profitable is when the sterling has crashed in comparison to the dollar/euro). England has in many ways become a city state based around london and a class of super-rich and finance and they have every incentive to keep the pound high. Leave the XJ and Range Rover production there (heritage purpose), but move the remainder to India and possibly the US. That would help a great deal.
It’s too bad that a company that makes such beautiful cars has been in so much challenged water. I’d like to see a carmaker produce beautiful and reliable cars…can it be done?…will it ever be done?
So EXTREMELY high demand in China for an OVERTAXED product has nothing to do with wanting to make some cars in China… Sure JLR need to reduced costs but by as much as other car makers in Europe who made significantly higher losses during the recession? I think not….
“…and if we maximize our strengths, then we should be able to realize strong growth.”
And what exactly are those “strengths”?
Twotone
Ready to leap, yes. Able, no.
relying on the crisis to end is a poor business plan.
they need to be able to survive DURING a crisis, only then will they be strong during periods of prosperity as well.