 | Home > Off Topic > JLR stuck at a red light with its strategy on hold |
 
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018   
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Interesting piece in the Telegraph:
"There’s a saying in the West Midlands that when Jaguar Land Rover sneezes, the region catches a cold. Not only employees, but the network of suppliers and thousands of other businesses that depend on economic activity generated by the company are awaiting JLR chief executive Thierry Bolloré setting out his strategy for Britain’s biggest carmaker. Bolloré was a surprise appointment to take over the wheel from Sir Ralf Speth. Ousted from Renault in late 2019, Bolloré parked up at JLR’s Gaydon base in September. But his vision for the company after his predecessor’s decade-long reign is overdue. Insiders first talked about it coming before Christmas, then early in the new year. Friday’s quarterly results were seen as a peg to hang the event on, but those in the know say this is now unlikely. “Maybe mid-February, the end of February, who knows?” says one source. “There must be something going on for the delays.”  Click image to enlarge Thierry Bolloré took the top job at JLR in September. The industry is still waiting to hear how he will move forward The Castle Bromwich debate There’s no doubt JLR is in reverse. Sales were diving before the pandemic, from a peak of 614,000 two years ago to 426,000 in the last calendar year, with commensurate financial woes. A minnow in the car industry, where giants such as VW Group and Toyota sell 10m cars annually and scale is key to absorbing huge costs, JLR is falling short of the 1m sales aspiration Speth set in the early 2000s. Bolloré has options, and some potential moves are obvious. JLR has facilities to produce many more cars than it currently does, raising questions over further cutbacks, on top of thousands of staff shed by his predecessor. The company’s Castle Bromwich plant – home to Jaguar’s saloons since the Seventies – is now largely idle, with demand for its cars low. Staff have been transferred to the Solihull plant, which produces more popular and profitable Range Rovers and Jaguar F-Pace SUVs as it battles staff shortages caused by Covid outbreaks. Click image to enlarge Plans to build an electric version of the flagship XJ saloon at Castle Bromwich and make the plant a centre for electrification have been delayed by the pandemic and poor sales. One source with knowledge of JLR’s strategy argues delaying the electric XJ has thrown up problems, as it was the first of three cars intended to share the same platform. “The question is whether the electric XJ is delayed or shelved,” they say. “The electric strategy depended on making all three to stack up.” Currently, the company’s only all-electric car is the Jaguar I-Pace, making up a quarter of all Jaguar sales, and made by contract manufacturer Magna Steyr in Austria. Ending the Castle Bromwich debate by shutting it and consolidating Jaguar production – less than a quarter of the group’s total sales – would be a bold statement from Bolloré. Farewell to the saloon? Perhaps an even more extreme move would be killing off Jaguar’s saloons altogether. “How can you go up against BMW’s ultimate driving machine and win?” asks one insider. “Speth backed them and is linked to them, Bolloré is not.” Production could be put into other plants; potentially the Chinese joint venture that already produces some of JLR’s range, the company’s giant new plant in low-cost Slovakia, or even Magna, which makes Jaguar’s E-Pace small SUV. But this would be a painful move that would send shock waves through the West Midlands. Unions are unlikely to accept it. “We could close down the business quicker than management could,” says one veteran workers’ representative. Click image to enlarge Still, Jaguar’s saloons might not have a future in an electrified world, according to Jim Holder, editorial director at Autocar and What Car?. “Electric kills low-slung saloons,” he says. “Big batteries need high-riding cars – SUVs – to fit them underneath. JLR’s path to redemption may be SUVs, but then there’s the problem of the company eating its own lunch.” Full range JLR has 14 models – three saloons, the F-Type sports car, and the rest SUVs, which make up 90pc of total sales. The problem is, these SUVs are often in the same segment, meaning they not only compete with rival manufacturers, but each other, known as “cannibalisation”. The E-Pace and Range Rover Evoque overlap. The Evoque is JLR’s single bestselling car, making up 17pc of sales, while the E-Pace is on 7pc. Jaguar’s F-Pace and Velar also face off against each other, and both to a lesser extent compete with the mid-size Range Rover Sport and Discovery Sport models, with the electric I-Pace also edging into the market on size alone. At the top end, the largest Range Rover fights the Discovery, and the biggest Defenders also get a look in. Bolloré could clean up these confusions for buyers – the Velar and the E-Pace are seen as vulnerable. Introducing new SUVs in as yet untapped segments, such as mini-SUVs, could also be in the works. Click image to enlarge However, a portfolio cull may not be the magic bullet. “Inter-brand competition is not the reason JLR is in a mess,” says Ian Henry of Autoanalysis. “Other brands do it. Sharing platforms saves money as you share components, allowing you to build scale cheaply.” Daksh Gupta, chief executive of car dealer Marshall Motors, also has doubts. “You can’t know what’s going through a customer’s mind but the brands are different,” he says. “The big Range Rover is the ‘king of road’ – it’s aspirational. Jaguar’s SUVs are smaller, cheaper, younger.” Gupta wants to see JLR becoming “more premium”, saying if Bolloré can move upmarket – particularly with Range Rover – customers will buy into it. Inside the company, there’s an acknowledgement of a branding issue. “There’s a perception among management that ‘JLR’ should only be used internally,” says one source, explaining that lumping the two together damages the far more profitable Land Rover side. Scaling up But all these measures could just be tinkering. JLR’s real problem remains scale, and maybe the reason behind the delay is something even bolder that could address a structural problem: linking up with another company to create a player with the scale to compete. “It would solve a lot of problems,” says Prof David Bailey, an automotive industry expert at Birmingham University. “JLR and BMW have a lot of similarities and are already working together on sharing engines and electric drive trains. Maybe sharing platforms is next and a partnership the final step.” In the current environment, with car sales in freefall thanks to the pandemic, Bolloré has more latitude to make extreme moves than at any other time. But when he finally reveals his plan, it’s likely to be costly, warns Henry. “He might have a blank sheet of paper but whatever route he takes, it will be expensive, financially and politically. But somehow he’s got to make it work.” JLR declined to comment." https://www.telegraph.co.uk/business/2021/...tegy-hold/ [may need free registration to view] |
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24th Jan 2021 8:02am |
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| Grenadier Member Since: 23 Jul 2014 Location: The foot of Mont Blanc... Posts: 5829  
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Interesting and says a couple of things I've felt in recent years. Aside from reliability reputation, the three biggest issues to me (with regard to JLRs freefalling and losses) were the cannibalisation both within LR but also between LR and J, the bloated offerings and the fact that they were not exclusive or premium enough (as for example Roller, Bentley, Ferrari etc) at the top end to charge high prices and overcome low unit sales, but not were they capable of selling the unit numbers required to survive within their executive price point. Halve the number of models, create a clear style/price split between 'Range' and 'Land' with little or no overlap, and get rid of the Jag SUVs or badge them as 'Land' SUVs for youngsters. That's the LR bit.
40+ years ago, Jaguar were a premium brand just a step down from Roller and Bentley, and with only top end Mercs for competition. When did they compromise and start pitching themselves against 5 Series and A6? If J handed responsibility of SUVs to LR, they could rebrand themselves as premium sports saloons once again. 100k+ cars, all electric, going up against Tesla and Porsche. Like the old days. Luxurious, fast, exclusive and aimed at middle aged men. No reason they can't also continue 2-seaters. J are currently a Porsche that's not quite made it. Get rid of the SUV (the family can do that for them) up the quality, pace and handling of their offerings (they have more than enough in-house expertise) and reclaim that premium saloon title. Everyone wants a 'Jaaag'. Just imagaine if it was a fast, reliable, luxurious and handled as well as the new Taycan.   Monsieur Le Grenadier
I've not been everywhere, but it's on my list..... 2011 Puma 110DC - Corris Grey |
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24th Jan 2021 8:43am |
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| ickle Member Since: 22 Jul 2010 Location: South Vendee Posts: 1786 
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One of the biggest things they need to change is dealer attitude.
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24th Jan 2021 9:05am |
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| Grenadier Member Since: 23 Jul 2014 Location: The foot of Mont Blanc... Posts: 5829
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"See the US only Bronco Sport (not full size Bronco) for inspiration. They could partner with one of the big makers and adapt an existing platform and I think they wouldn’t be able to build them fast enough."
Are you suggesting that if LR created a modern iteration of one of its off road classics, retaining its retro looks and launching it at a sensible price point, it might help them? You mean the Defender. Excellent idea. Now you just need to convince Gerry. Talking of Gerry, getting rid of him would probably be a good start. The endless cross pollination of looks and models is largely down to him. In terms of partnering, who with? Merc already have AMG and now Aston, Audi group have Porsche, BMW just get on doing their own thing and bar engines why would they help a brand that is currently a like for like competitor. At the premium end of SUVs you only have Bentley and Roller, yet the FFRR has for fifty years been the must have model, it could regain that. For the Jag side of things, clearly you can't just rebrand a mediocre 5-series type saloon just because it's got a big cat on the bonnet. You suspend the brand, redevelop and relaunch with a brand new car. Ground up. Like Tesla. Like Taycan. Technology as well as styling. What they need is an investor who's got the budget to invest in a new car company and values British heritage. Sadly, their treatment of Ratcliffe who could have been perfect, means there's no one out there. Imagine Jag using Ineos funds and connections to become the British Tesla. And on Bolloré, he comes from a company that's basically survived because of unbelievable investment by the French govt. He doesn't stand a chance if any of his future plans involves going to the UK Govt for handouts to shore the company up. Monsieur Le Grenadier I've not been everywhere, but it's on my list..... 2011 Puma 110DC - Corris Grey |
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24th Jan 2021 9:16am |
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018
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Imagine if JLR, or LR at the time, had gone after Drew Bowler when he first started modifying Land Rovers and sticking Bowler badges on them?
Annoying Ineos and not having the courage of their convictions in selling off rather than destroying the old Defender tooling remains to me another symptom that the wrong people were in charge at JLR. |
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24th Jan 2021 9:24am |
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| lohr500 Member Since: 14 Sep 2014 Location: Skipton Posts: 1317 
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I think if you were to ask most people outside of JLR, they would say range overlap is much greater than JLR seem to think, or are willing to admit! To suggest such a small overlap between new Defender and RRS/Disco is nonsense in my opinion. And as for all the other offerings, I struggle to tell them apart or understand how they are supposed to target different customers. Then look at the sprawling geographical infrastructure and overhead for such a small niche player and it's not difficult to see why they have problems. Inevitably in my opinion that they won't exist in 5 years time. They will either be swallowed up by a major player and a radical reduction in the product offering will swiftly follow, or there will be a brand grabbing fire sale as they head to oblivion. Perhaps the new hatchet man can act quickly enough to prevent what looks like a train approaching the buffers at full speed, but I doubt it. |
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24th Jan 2021 9:27am |
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| Fellrunner Member Since: 28 Sep 2014 Location: Wandering Posts: 258  
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“ I think if you were to ask most people outside of JLR, they would say range overlap is much greater than JLR seem to think, or are willing to admit! To suggest such a small overlap between new Defender and RRS/Disco is nonsense in my opinion.
And as for all the other offerings, I struggle to tell them apart or understand how they are supposed to target different customers.” I agree. I also think they’re going to run out of road very quickly (and arguably have already done so) in continuing to try to push up prices without significant improvements in underlying reliability/quality across their models, let alone their after sales dealer experience. Perhaps they’re cynical enough to continue to seek first time buyers only, but I hope not and it wouldn’t make sense commercially. By way of personal example ... I’m thinking about changing my daily driver this year. After a few years of fun in an Aston, the plan was to go back to a Range Rover. After a few years away from them, the pain and frustration of my last RR (reliability and dealership) has ebbed away. So, I’ve been test driving a few cars recently. Now, whilst the RR is a lovely place to be, it quickly feels very dated with a number of cheap edges compared to something like the GLS. Even something as simple as the air bags which operate the seat massage function; silent in the Merc yet you can hear them working in the RR. Admittedly a small example, but it’s things like this which mean that the RR just doesn’t square up with top line models which it now has to compete with from other marques. I love LRs (in particular old Defenders and RR), but for far too long they’ve traded on immense brand loyalty and selling a life style which their products don’t quite live up to their side of the bargain on. |
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24th Jan 2021 10:45am |
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| familymad Member Since: 13 Dec 2011 Location: Bucks Posts: 3481 
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Re tool the Defender classic line. Just like Toyota and the previous G wagon do.
Re name new Defender the Discovery 6 Bin the Disco 5 Launch new FFRR and separate it from Evoque in looks Keep and build on the excellent Disco Sport. Launch a baby one of that. 1951 80" S1 2.0 1995 110 300TDI 1995 90 300TDI |
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24th Jan 2021 11:10am |
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| blackwolf Member Since: 03 Nov 2009 Location: South West England Posts: 17450 
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^^^ Perhaps rename the Disco Sport whilst they're at it, giving it a catchy new name. Something like "Freelander", perhaps?
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24th Jan 2021 12:11pm |
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| mse Member Since: 06 Apr 2008 Location: UK Posts: 5038 
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I would be the first to say an entry to the brand, freelander, is important
I feel for JLR, the reliability comments harp from rover group...yet in all land rover I’ve had reliability isn’t what people believe...in fact I would argue there are worse and more difficult to fix. That said quality could get better and whoever said about the dealers is spot on. Brand overlap, I get the point...don’t fully agree...but there are some odd views in the lineup Mike |
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24th Jan 2021 4:25pm |
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| 90 Dreamer Member Since: 13 Jul 2019 Location: Oop North Posts: 2169 
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Could be worse, could have bought a sooper dooper Merc AMG and had a £6K bill for "intelligent" headlights........
Luckily it was argued under warranty |
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24th Jan 2021 4:34pm |
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