An editorial from Dave Leggett
I guess the big picture in the Ford-Tata deal for Jaguar and
Land Rover announced last week is the seismic shift in the
global economy that it points to. A long established Western
company, Ford, is deep in the financial mire and having to
sell assets just to survive. And it’s an Indian company that
has emerged to buy those assets.
The transfer of ownership of two such quintessentially
British brands to India has an even deeper resonance for
many in both Britain and India when you consider the history
of relations between the two countries. And this takes Tata
Motors into the big time in one step – these are two major
brands with global footprints (by comparison Chinese firms
are still struggling to make headway globally).
So, what went wrong with Ford’s JLR stewardship? With Land
Rover not all that much (let’s not get into quality issues,
they go way back and Ford’s only had LR since 2000). With
Jaguar, it went for volume and tried to mix it with Merc and
BMW. The strategy failed.
Around the beginning of this decade, Ford decided to
really go for it with Jaguar. The idea was to lever off Ford
Group platforms to save cost and also reposition Jaguar as a
brand to take on the likes of Mercedes-Benz and BMW in the
higher volume executive car segments. The theory was
certainly seductive. This was Ford’s PAG really coming
together.
First we got the S-Type (criticised by some as an overly
‘Amercanised’ product, but it wasn’t that bad). The real
howler, it turned out, was the X-Type. It never came close
to the ambitious targets set for it. Was the Mondeo
platform-based car an utter lemon? No, but it simply could
not do the job set for it.
I recall the then Jaguar MD Jonathan Browning telling me
in 2001, just as X-Type was launching, that the aim was to
achieve overall Jaguar volume in the region of 200,000 units
annually in the medium-term. The X-Type was supposed to be a
big part of the doubling of overall Jag volume from a level
of about 100,000 units back then.
In 2004, when I interviewed Nick Scheele (by then Ford
COO, but still a Jag stalwart who had done much to turn the
brand around on quality) in his office in Dearborn, Jaguar
was at around 125,000 units of volume per annum and only
just rolling out a diesel-engine on the X-Type – the absence
of which had been a big handicap in Europe. He defended the
X-Type but acknowledged the problems faced by the late
diesel in Europe and a US market that had become a
‘dogfight’ in the X-Type’s segment.
Ultimately, the X-Type simply didn’t appeal to enough
people in a segment ruled by the likes of the BMW 3 Series.
Jaguar had bitten off more than it could chew with the X.
Losses mounted and Browns Lane bit the dust as an assembly
plant.
The cost squeeze seems to have done the trick on moving
Jaguar close to breakeven now. The S-Type replacement, the
XF, is a car that has had very good reviews. The design
eschews the three-box trad-Jag look that constrained the
broadening of the appeal on both the S and X. That looks
like a good move.
With the XF’s market impact to come, Tata has perhaps
taken over Jaguar at a very good time. Annual Jaguar
production slumped to just 54,000 units last year. From what
I hear, feet are well and truly on the ground at Jaguar
these days and the positioning of the brand going forward
will be sensitive to the unfortunate experience with the
X-Type. Getting Jaguar to around 100,000 units a year sounds
like a reasonable mid-term goal; a recovery to a sustainable
level, Jaguar positioned firmly in an upscale part of the
market. The success of the XF in the market will be crucial,
but as the song says, and given where Jaguar is right now,
the only way is up.
Courtsey : http://www.just-auto.com
