RE: Jaguar Land Rover facing "perfect storm"
Discussion
JLR do have old models such as the Jag XF and XJ but Jaguar is around 10% of all JLR output so that isn’t a keen issue. Also Jaguar sales are rising. Land Rover (80% + of which is exported) sales are falling especially in China were the association with Cherry (a third tier auto manufacture in China) has devalued the brand. Also the brand is seen as too expensive.
JLR need to reduce costs and price but maintain or increase margins.
What is an issue is that UK output/productivity is low which in the main part comes from old plant and equipment. I do agree the workforce can be lacklustre but they too see that they can only output so much given the tools they have. Also to live in the UK costs a packet so UK based staff chase higher wages. All in all the cost base in the UK is too high, hence all the Eastern EU workers.
The usual response from this Government is “well the company should invest” and JLR have – in a whopping great factory, nearly twice the size of that planned, in Slovakia. The factory is virtually the size of the town it is next to!
Now this plant can easily output 500,000 vehicles, labour is cheaper and the government is actively supporting the company in its investment and training of staff. Now given there will be a maturation period for the site, I reckon it could start outputting 250,000 vehicles in 18 months. It has also made a very good job of introducing the Discovery. Using Slovakia JLR can operate from a country with trade agreements in place, known trading costs and easy access to the global markets. All in all Slovakia is a known cheaper cost base and Brexit has forced JLRs hand to increase its investment elsewhere - and when it has it looks rosy. Not politics just numbers.
So why all this fluff around cost cutting in the UK and commitment. Put simply the UK Gov reluctantly support an element of JLR research (not as much as you think) so it would be bad form to cheese off that benefactor.
forgot to say - so the cost cutting is an easy move of operations from the UK to Slovakia and if you look closely their tier 1 suppliers have alredy made the move.....
Oh and the Chinese owner of Volvo isn’t doing too well either
JLR need to reduce costs and price but maintain or increase margins.
What is an issue is that UK output/productivity is low which in the main part comes from old plant and equipment. I do agree the workforce can be lacklustre but they too see that they can only output so much given the tools they have. Also to live in the UK costs a packet so UK based staff chase higher wages. All in all the cost base in the UK is too high, hence all the Eastern EU workers.
The usual response from this Government is “well the company should invest” and JLR have – in a whopping great factory, nearly twice the size of that planned, in Slovakia. The factory is virtually the size of the town it is next to!
Now this plant can easily output 500,000 vehicles, labour is cheaper and the government is actively supporting the company in its investment and training of staff. Now given there will be a maturation period for the site, I reckon it could start outputting 250,000 vehicles in 18 months. It has also made a very good job of introducing the Discovery. Using Slovakia JLR can operate from a country with trade agreements in place, known trading costs and easy access to the global markets. All in all Slovakia is a known cheaper cost base and Brexit has forced JLRs hand to increase its investment elsewhere - and when it has it looks rosy. Not politics just numbers.
So why all this fluff around cost cutting in the UK and commitment. Put simply the UK Gov reluctantly support an element of JLR research (not as much as you think) so it would be bad form to cheese off that benefactor.
forgot to say - so the cost cutting is an easy move of operations from the UK to Slovakia and if you look closely their tier 1 suppliers have alredy made the move.....
Oh and the Chinese owner of Volvo isn’t doing too well either
Edited by Veg on Thursday 10th January 13:55
Edited by Veg on Thursday 10th January 13:56
Kierkegaard said:
Krikkit said:
Mercedes, Audi and BMW have spent their way out of the dieselgate scandal in a way that JLR simply can't - they haven't got the resource to be able to rush through a new generation of petrol engines and wave the shiny hybrids around.
Exactly, so how on earth is JLR going to improve by cutting costs and staff! They hardly have an enviable reputation for reliability - further cost cutting is not exactly going to improve that situation.Once that's done they can look at how they want to tackle the changing markets and re-invest if necessary.
I don't think we should be rubbing our hands waiting for the administrators yet - this is the first step to revitalising their strategy. Whatever we think about companies like JLR they will have teams of people thinking and chewing over every single thing we can think of and more to find a solution and strategy.
ETA: Reading around, a lot of manufacturers are going to struggle in China - every single OEM has been gearing up to shovel more cars into the Chinese market, and even small fluctuations have a big effect on the sales of the "premium" manufacturers like Mercedes, Audi, BMW, Volvo, JLR etc etc. December saw car sales demand fall 44% in China after falling a bit flat the rest of the year - that's the danger.
Edited by Krikkit on Thursday 10th January 13:53
Dr Interceptor said:
NJJ said:
and where is the F-Pace SVR?! That model seems to be taking an age to come out..
That has been out since March 2018.What I get from Jag these days, what with the four bangers and the electrification, is that they really, really want to be where Volvo are now. Which, speaking as someone who lusts after cars like the XFR-S sportbrake and the the XJL Supersport, is kind of a shame regardless of whether or not they're profitable.
When the first gen XF came out it felt different and was a genuine kick up the backside for the mainly German competition, new XJ was controversial but looked like nothing else when it was launched and F-Type was at last a proper sports car from Jaguar. There was a momentum back then but this has dried up with too many 'that'll do' cars like XE, XF, E-Pace despite them being good steers (E-Pace aside). I-Pace shows that there is still some magic somewhere, so Jaguar: Be brave, be bold, be gold (quality wise) but for goodness sake do not do bland again.
JLR sales were broadly flat in the UK at around 115,000 units (down from 118k so 2.5% down) they were ahead of the overall market in that respect which was down 7% and had record sales in the US, but managed a 50% decline in China vs an overall industry decline of 6% due to the tariff issues.
The Chinese 50% decline vs 6% is the thing that needs explaining as the UK and US sales performance does not point to a business in crisis, in China they certainly are, I wonder if they had disputes with their dealer network over there and that the other players sought to bolster demand by offering incentives and support that JLR either couldn't or wouldn't.
The Chinese 50% decline vs 6% is the thing that needs explaining as the UK and US sales performance does not point to a business in crisis, in China they certainly are, I wonder if they had disputes with their dealer network over there and that the other players sought to bolster demand by offering incentives and support that JLR either couldn't or wouldn't.
camel_landy said:
GAFF1974 said:
The British obsession with all things German doesn't help. Even the police don't "drive the flag".
(Yes I know they're owned by TATA but it's as close as you'll get)
+1(Yes I know they're owned by TATA but it's as close as you'll get)
M
As an example, and to give some backstory: When I got rid of my M135i almost 18 months ago, I wanted a big SUV.
My family and lots of family friends, like lots of others, have had Land Rovers and Jaguars for as long as I can remember. My earliest memories are being taken to Kindergarten squeezed into the back of a family friend's XJ-S, or the back of a CSL Range Rover, or an X300 Sport. I once broke my nose as a 7 year old when I walked into a Post-Box when I was too busy looking at an XJ-S Convertible in Rochdale.
My dad's had two Discoveries for the last 20 years. He spent so much on them, that he was invited to his Land Rover Man's Retirement Party. My second car was a 300tdi Discovery purchased when I was still at Uni, 10 years ago. I'm no stranger to the Green Oval, I've gone in with open eyes and know you can't treat them like a normal car. They need maintenance and they need care and attention. Treat it like a Focus, try and run it without reguar maintenance and it won't thank you for it.
Naturally, my first port of call was to the local Land Rover Dealer. Dealer, because I wanted a car with a manufacturers warranty that would cover any costs incurred during my commute to my old job and back (60 miles/day) plus regular weekend trips and an annual ski-trip to France. So relatively new, rather than an older car that someone might not have looked after properly. Don't mind a bit of preventative maintenance work, but when it becomes more regular, it's a bit boring.
The average cost of Discovery 4's was incredibly high in comparison to the German alternatives.
So I ended up with a Touareg. I paid £10k less than I would have for an equivalent Disco 4, it had 9k miles on it, rather than 60k. 2 years old, not 3. It has all the equipment that a Discovery does (apart from the extreme 4x4 capability, which, for the number of times I'm likely to use it, I can sacrifice).
BMW X5's - Merc GLE/M-Class were the same, less expensive than the Land Rover, for something that's newer, lower mileage and with the same amount of equipment.
I've got a mate who's in the same boat. Had Land Rovers in all the time that I've known him (apart from a brief dalliance with BMW that he's trying to forget). Currently has a Freelander 2, but wants a newer car when he retires. Wants a Disco 4, but can't justify the extra cost over the German equivalent, so he's likely to end up with a VW like mine. The difference, whichever way you square it, is a lot of money to pay for a badge.
I'd love a Land Rover again, I really would. But It's becoming ever harder to justify them in the face of the competition.
Kierkegaard said:
LimaDelta said:
They are no longer aspirational, they are very much achievable. Hence the devaluation of the brand. in the past, you needed to be pretty comfortable to afford a Range Rover, now you can be driving around in a 'Range Rover' for £300/month (even a proper one for a grand). They are now no better than BMW/Audi in this regard. The same car, in seven different sizes, just like the Audi/BMW model. And by chasing volume they have lost sight of what made them desirable in the first place. Just look at the picture chosen by PH to represent the brand in the news article, a orange RRS with a black bonnet. That is what RR has become, and by extension pretty much the whole LR range.
That's the situation with all new cars at the moment so it's a bit unfair to pick on LR for it. You're right though in regards to the Range Rover going downmarket with their range - the Evoque could be just a 'Land Rover Evoque' I don't think it would have made a lot of difference even. Same with the Velar. You also can't, unfortunately, choose who you sell your cars to and the current trend of expensive cars painted in lurid colours with dark wheels in 'footballer spec' again are victims of all brands.. just look at Bentley and Aston Martin.
M
camel_landy said:
Yep, I tend to agree with you on that one.
IMO - They've devalued the brand(s), by trying to appeal to the emerging and consumer end of the market. They've ridden a wave of popularity but the tastes have changed leaving them with too many models, competing in 'saturated' and fickle markets.
Management went for quantity instead of focusing on quality.
My 2p
M
It all went wrong when they hire Victoria Beckham. I'm not suggesting that she is responsible for any of the woes, but if a car company resorts to hiring Victoria as a consultant, there's trouble ahead.IMO - They've devalued the brand(s), by trying to appeal to the emerging and consumer end of the market. They've ridden a wave of popularity but the tastes have changed leaving them with too many models, competing in 'saturated' and fickle markets.
Management went for quantity instead of focusing on quality.
My 2p
M
Ray_Aber said:
Two points to make.
2. The offering
Last year, I was looking for a mid size car that would suit a rural environment, a very steep drive, and the ability to take bikes, dogs etc. I wanted an estate; the Steering Committee wanted an SUV for (a) ease of access (high hip point) and (b) visibility. SUV it was. I tested the Jag F-Pace and the (new) Volvo XC60. The German cars were non starters - boring and fugly/bland (outside and in) apart from the Porsche Macan which was above our price point.
We chose the XC60T5. Why?
- the interior is way superior to the Jaguar. You can get it in interior colours other than Coal Bunker Black too (which I will never accept)
- the deal was considerably better in terms of car for buck
- the car's user interface was considerably better than the Jag. The 360 degree reversing camera is a sight to behold. The Jag had nothing as good. This is the stuff that sways decisions.
What was the F-Pace better at?
- handling. Way way better. The F-Pace is a fabulous steer.
- looks. I love the XC60's looks (ours is metallic red) but the Jaguar is gorgeous.
In the end it came down to pricing and the driving environment. The Volvo feels and looks superior. It's an okay drive, but this is an SUV, not an MX5. I don't look to scrape the door handles while driving Pooch to the nearest park. The price was about £150/month cheaper too - that's significant.
Jaguar, much more than Land Rover, need to seriously up their game in terms of interior quality and style. The XE has a great chassis and drives brilliantly (I llke the looks too) but it's interior really is low rent. No flair. Audi are way better in terms of presentation and "feel". That stuff sells cars, I would have paid that premium if the car felt premium - but it didn't.
I agree with the points about reliance on diesels, but the comment on the i-Pace being rubbish? Really? Nonsense! It sold 2,300 in the NL alone in December - outselling the Tesla models by some margin, The Audi's e-Tron is a fugly girning blob by comparison. It's Jaguar's future - or the beginning of it. Old Jags had grace, space and pace. So too does the i-Pace.
Good example of what Jag are up against.2. The offering
Last year, I was looking for a mid size car that would suit a rural environment, a very steep drive, and the ability to take bikes, dogs etc. I wanted an estate; the Steering Committee wanted an SUV for (a) ease of access (high hip point) and (b) visibility. SUV it was. I tested the Jag F-Pace and the (new) Volvo XC60. The German cars were non starters - boring and fugly/bland (outside and in) apart from the Porsche Macan which was above our price point.
We chose the XC60T5. Why?
- the interior is way superior to the Jaguar. You can get it in interior colours other than Coal Bunker Black too (which I will never accept)
- the deal was considerably better in terms of car for buck
- the car's user interface was considerably better than the Jag. The 360 degree reversing camera is a sight to behold. The Jag had nothing as good. This is the stuff that sways decisions.
What was the F-Pace better at?
- handling. Way way better. The F-Pace is a fabulous steer.
- looks. I love the XC60's looks (ours is metallic red) but the Jaguar is gorgeous.
In the end it came down to pricing and the driving environment. The Volvo feels and looks superior. It's an okay drive, but this is an SUV, not an MX5. I don't look to scrape the door handles while driving Pooch to the nearest park. The price was about £150/month cheaper too - that's significant.
Jaguar, much more than Land Rover, need to seriously up their game in terms of interior quality and style. The XE has a great chassis and drives brilliantly (I llke the looks too) but it's interior really is low rent. No flair. Audi are way better in terms of presentation and "feel". That stuff sells cars, I would have paid that premium if the car felt premium - but it didn't.
I agree with the points about reliance on diesels, but the comment on the i-Pace being rubbish? Really? Nonsense! It sold 2,300 in the NL alone in December - outselling the Tesla models by some margin, The Audi's e-Tron is a fugly girning blob by comparison. It's Jaguar's future - or the beginning of it. Old Jags had grace, space and pace. So too does the i-Pace.
+1 on your view on the I-Pace. From what I've read so far it deserves to sell better than the likes of the Audi e-Tron and Merc EQC, neither of which seem to bring anything extra to the party.
suffolk009 said:
It all went wrong when they hire Victoria Beckham. I'm not suggesting that she is responsible for any of the woes, but if a car company resorts to hiring Victoria as a consultant, there's trouble ahead.
I suspect she was there for the photo/product placement and I'd be surprised if she had any actual input into the design process.M
Tom_Spotley_When said:
I'd love a Land Rover again, I really would. But It's becoming ever harder to justify them in the face of the competition.
We're in a similar boat.My partner and I are likely to buy our first proper SUV in the next 3 months and we've been considering options. We'll be keeping the car for at least 5 years and ideally want a car with at least 2 years' manufacturers warranty. We'd really like a Disco 5 but the prices are high compared to the German equivalents when similarly optioned; I'm also not convinced a Disco 5 is going to be anything other than a pain in terms of reliability.
A real shame.
MrBarry123 said:
We're in a similar boat.
My partner and I are likely to buy our first proper SUV in the next 3 months and we've been considering options. We'll be keeping the car for at least 5 years and ideally want a car with at least 2 years' manufacturers warranty. We'd really like a Disco 5 but the prices are high compared to the German equivalents when similarly optioned; I'm also not convinced a Disco 5 is going to be anything other than a pain in terms of reliability.
A real shame.
I'd honestly go for a Kia sorento. We ditched a volvo xc90 for one. Hold their money very well, 7 year warranty.My partner and I are likely to buy our first proper SUV in the next 3 months and we've been considering options. We'll be keeping the car for at least 5 years and ideally want a car with at least 2 years' manufacturers warranty. We'd really like a Disco 5 but the prices are high compared to the German equivalents when similarly optioned; I'm also not convinced a Disco 5 is going to be anything other than a pain in terms of reliability.
A real shame.
camel_landy said:
suffolk009 said:
It all went wrong when they hire Victoria Beckham. I'm not suggesting that she is responsible for any of the woes, but if a car company resorts to hiring Victoria as a consultant, there's trouble ahead.
I suspect she was there for the photo/product placement and I'd be surprised if she had any actual input into the design process.M
camel_landy said:
suffolk009 said:
It all went wrong when they hire Victoria Beckham. I'm not suggesting that she is responsible for any of the woes, but if a car company resorts to hiring Victoria as a consultant, there's trouble ahead.
I suspect she was there for the photo/product placement and I'd be surprised if she had any actual input into the design process.M
And weren’t JLR ahead of the “influencer” curve by getting her to help promote their product?
suffolk009 said:
camel_landy said:
suffolk009 said:
It all went wrong when they hire Victoria Beckham. I'm not suggesting that she is responsible for any of the woes, but if a car company resorts to hiring Victoria as a consultant, there's trouble ahead.
I suspect she was there for the photo/product placement and I'd be surprised if she had any actual input into the design process.M
That's also an issue I've had with Jag growing up. They were always launching concept after concept and being lauded by the pro-British Motoring Press. When in fact nothing constructive was being done.Another point to make is that Jag isn't "young" in any way. BMW have MINI and the 1 series to push customers into 3, 4 and X models when they mature. Mercedes have the A-Class that is popular with teens and twenties. What do Jag have? Nowt.
Gassing Station | General Gassing | Top of Page | What's New | My Stuff