RE: Land Rover Defender | Frankfurt 2019
Discussion
cidered77 said:
I think general the concept of "brand dilution" exists mostly on internet forums, and not in real life. Is there any actual data that would support the hypothesis that a potential RR customer is put off because the Evoque exists - it's not not credible, and if there are those people out there (where else would they go? GLS when merc sales an A class?), they can't be of any meaningful volume.
We've got very good at a lot of things (including making cars...), but matching market research and product strategy to real data is definitely one we're generally now very very good at. The niches and sub niches all major OEMs cover now aren't because they are crazy - it's because people want these products, and they sell. .
Porsche devalued the brand when they launched the Cayenne so the Internet said - seemed to go OK for them....
Not quite... I'm not talking diluting with the other models (RRS, Evoque, Velar...), I'm talking about diluting the spec of the car (small engines, minimal spec, etc...).We've got very good at a lot of things (including making cars...), but matching market research and product strategy to real data is definitely one we're generally now very very good at. The niches and sub niches all major OEMs cover now aren't because they are crazy - it's because people want these products, and they sell. .
Porsche devalued the brand when they launched the Cayenne so the Internet said - seemed to go OK for them....
The Evoque & Velar have been fantastic and I really like them. It will be interesting to see what the very entry-level spec RR & RRS cars do to the residuals and the market.
Like I've said, it's nuanced and ultimately, we're going to have to wait and see.
M
unrepentant said:
I don't see any of that.
Average annual income of a FFRR customer in the US is over $500k. "Very low spec" cars (apart from DS) are the most difficult to sell. New Evoque has a residual of 62% at the end of a 3 yr / 36k lease, very high compared to most competitors. Demand for late model certified pre owned cars is very strong. Far from diluting or devaluing the brand it has become more aspirational as sales have grown. Defender will be huge.
TBH - I don't think you really get any of the low spec cars state side anyway...Average annual income of a FFRR customer in the US is over $500k. "Very low spec" cars (apart from DS) are the most difficult to sell. New Evoque has a residual of 62% at the end of a 3 yr / 36k lease, very high compared to most competitors. Demand for late model certified pre owned cars is very strong. Far from diluting or devaluing the brand it has become more aspirational as sales have grown. Defender will be huge.
...though I could be wrong.
But why are customers buying expensive Range Rovers in the US, instead of one of the domestic products (or even vs Merc or BMW)? Some of that 'desire' is driven my the exclusivity and wanting to stand out as driving a 'quality' European product... (Like it or loath it, there is sometimes a level of 'snobbishness' around the Range Rover.)
Over here, I see a lot of low spec RRs & RRSs on the roads, which I suspect has come about from capitalising the on combination of aspirational sales & cheap finance. If you do it too much, you're in danger of the brand looses some of that 'exclusivity'.
Like with everything, there are pros & cons and only time will tell.
Either way, this is a thread about the new Defender... If you want to continue, start a new thread but for now we'll park it here.
M
DonkeyApple said:
Yup. The long term economic risk to JLR is that they have ridden, sonperfectly, the enormous, global cultural change of the consumer over the last two decades. As consumption has become more rampant and the availability of consumer debt has fuelled this social change so JLR has directly profited and delivered product after product to meet these insatiable consumer demands.
But there is always evolution and it is perfectly logical to argue that in the future as/if money tightens for consumers that a sweeping cultural change away from premium goods may take place. In a decade from now we may be living in a society that shuns visual wealth and that will be a major issue for the purely premium brands in all markets and they will have to adapt.
However, whilenin a simplistic moment of thinking one may fall into the view that this means it is important for a firm like JLR to hedge this risk by creating non premium products at the bottom of the market it is a view that collapses when you think further and realise that it is not structurally possible. The company would simply go bust and so like all niche/premium goods manufacturers they must evolve as the market evolves. Exactly as they are doing with hybridisation and EVs. No seismic change to create a product before the market is there to buy it but steady evolution in line with the consumer market.
It’s the Catch 22 that most businesses operate under.
The biggest single risk to JLR is a cultural revolution to weight and size that is likely to be triggered by a wreaking in consumer spending power and growth in true environmental policies. And building cheap, utility 4x4s isn’t a hedge for that anyway. The hedge for that risk is taking its first little step in the next year or so with the planned estate car and the test as to whether the brand can actually transition away from overtly, tall products.
I think your comment about future spending power is the biggest risk to JLR and other premium manufacturers (aside from unpredictable/arbitrary regulatory changes). The world is grossly overborrowed and it is getting worse. One day there will be a reckoning. This happened to Land Rover (and many other businesses) in the early 1980s when over borrowed countries staggered under rapidly rising debts (fuelled by petrodollars), a problem compounded when US Fed rates spiked at c13-14% for both spot and long term Treasuries - all time highs. Many countries simply stopped buying; they had no cash, not even for spares. Then Land Rover needed to find and attempt to develop new markets in a hurry; hence the push of the Range Rover up market into luxury territory, and the attempts to tart up the Series 3 of the day followed by the 90/110 and the development of the Range Rover for the US market. It also closed some dozen small factories scattered around the Midlands and concentrated production on Solihull to save bucket loads of working capital and operating costs. Land Rover survived that scare; but survival was not inevitable, it required some brutal changes to the business.But there is always evolution and it is perfectly logical to argue that in the future as/if money tightens for consumers that a sweeping cultural change away from premium goods may take place. In a decade from now we may be living in a society that shuns visual wealth and that will be a major issue for the purely premium brands in all markets and they will have to adapt.
However, whilenin a simplistic moment of thinking one may fall into the view that this means it is important for a firm like JLR to hedge this risk by creating non premium products at the bottom of the market it is a view that collapses when you think further and realise that it is not structurally possible. The company would simply go bust and so like all niche/premium goods manufacturers they must evolve as the market evolves. Exactly as they are doing with hybridisation and EVs. No seismic change to create a product before the market is there to buy it but steady evolution in line with the consumer market.
It’s the Catch 22 that most businesses operate under.
The biggest single risk to JLR is a cultural revolution to weight and size that is likely to be triggered by a wreaking in consumer spending power and growth in true environmental policies. And building cheap, utility 4x4s isn’t a hedge for that anyway. The hedge for that risk is taking its first little step in the next year or so with the planned estate car and the test as to whether the brand can actually transition away from overtly, tall products.
Today, as you say, the pressure will come on consumer spending on which JLR depends. I asked my local dealer, the other day, what proportion of his sales were still cash and what were on extended terms; answer c20% cash, 80% terms. If the availability of consumer finance comes under pressure, then JLR like many others will be in trouble. The pressure is on. Negative interest rates abound, QE must be at or near its effective end of life. The new Defender is a timely launch for the company. I think they have done a very good job with it - so much so I have placed an order for one. It looks to me it has been designed with a wide array of markets in mind; I think the commercial version will be well placed to succeed and surprise with its potential range of use and applications. It will, I suspect, provide some essential underpinning to demand in the years ahead.
camel_landy said:
Not quite... I'm not talking diluting with the other models (RRS, Evoque, Velar...), I'm talking about diluting the spec of the car (small engines, minimal spec, etc...).
The Evoque & Velar have been fantastic and I really like them. It will be interesting to see what the very entry-level spec RR & RRS cars do to the residuals and the market.
Like I've said, it's nuanced and ultimately, we're going to have to wait and see.
M
Are the specs lower? The engine size might be, but that is driven by the modern world and it's emissions/environmental pursuits. The FFRR was criticised for adopting diesel, and yet the TDV8 has been the biggest seller for years.The Evoque & Velar have been fantastic and I really like them. It will be interesting to see what the very entry-level spec RR & RRS cars do to the residuals and the market.
Like I've said, it's nuanced and ultimately, we're going to have to wait and see.
M
Having recently driven the P400e, I'd go as far as to say this is the most FFRR power plant I've driven (although I'd still go RRS SVR first
)soxboy said:
oldtimer2 said:
The new Defender is a timely launch for the company. I think they have done a very good job with it - so much so I have placed an order for one.
That's good to hear. As a matter of interest, what is it replacing?Track_Cit said:
Is it only me who think it looks shat?
I don't think it looks bad.It just looks like a new 4x4 and if you try you can see it's got cues from the old Defender. Which is probably what they were going for.
It was never going to look like some wild outlandish supercar with curves everywhere and aero inspired swooshes.
It's:
Hi I'd like a chunk of 4x4 please?
Certainly sir would you like us to lop off a 110 or a 90?
I think a 90 will do it.
<swoosh thud>
There you go sir, now will it be card or bank transfer?
It is amusing that after years of spiralling SUV demand leading way to spiralling SUV supply, and the perennial complaints of no off-road ability, low hanging painted skirts/sills, over styled design, cars on stilts, poor practicality, minimal utilitarian appeal etc etc.....Land Rover launch a car that IS rugged in both looks and ability, does have off-road ability, swaps 'pretty' for rugged looks...and still people complain.
It's almost as if a group of people are never going to be satisfied.....?
It's almost as if a group of people are never going to be satisfied.....?
Ares said:
It is amusing that after years of spiralling SUV demand leading way to spiralling SUV supply, and the perennial complaints of no off-road ability, low hanging painted skirts/sills, over styled design, cars on stilts, poor practicality, minimal utilitarian appeal etc etc.....Land Rover launch a car that IS rugged in both looks and ability, does have off-road ability, swaps 'pretty' for rugged looks...and still people complain.
It's almost as if a group of people are never going to be satisfied.....?
The thing is, even the great white hope that is the Ineos Defender may still not be the salvation. Article linked below has various points including:It's almost as if a group of people are never going to be satisfied.....?
'BMW engines - either BMW’s 252bhp 2.0-litre turbocharged petrol, and BMW’s 261bhp 3.0-litre straight-six diesels'.
'The company is targeting a working audience, hoping to capitalise on the booming four-wheel-drive double-cab pick-up market, offering Projekt Grenadier as an alternative to the Volkswagen Amarok, Ford Ranger and Mercedes X Class'.
'Prices are yet to be officially announced, but INEOS has confirmed that it will “not be competing at the bottom end of the market.” Expect a starting price of around £30,000, climbing to around £45,000 for range-topping models'.
https://www.autoexpress.co.uk/land-rover/defender/...
AngryPartsBloke said:
Munter said:
NomduJour said:
They haven’t really competed in that market for a very long time, and the world is a very different place from when we knew the Empire and Commonwealth had to buy British products. They don’t have the global manufacturing facilities, the sales and parts networks, or the partnerships required to sell hundreds of thousands of low margin/high volume basic vehicles.
It would have been nice to see a really basic version of new Defender, but when companies with the global scale and reach of VW and Mercedes can’t make the sums work in that market, how were JLR going to?
But instead they have released a vehicle that's going to compete in the same price range and sector as some of their other vehicles. How are JLR going to make the sums work on that?It would have been nice to see a really basic version of new Defender, but when companies with the global scale and reach of VW and Mercedes can’t make the sums work in that market, how were JLR going to?
It'll be interesting to see if they put themselves in this sort of position:
Yay we sold 20,000 Defenders this year
Boo we lost 20,000 Discovery sales year
I think the Defender & Disco are different in their offering so as not to have the effect you're suggesting.
That said we will have to see.
If the 90, 110 and 130 fulfill the role of the Disco and Disco Sport and they can create a model range that spans from the affordable end of the LR bracket up to sitting under/next to the Range Rover Sport then maybe they don’t plan to continue with the Disco brand?
DonkeyApple said:
I guess it is also plausible that there is no plan for there to be a Discovery 6?
If the 90, 110 and 130 fulfill the role of the Disco and Disco Sport and they can create a model range that spans from the affordable end of the LR bracket up to sitting under/next to the Range Rover Sport then maybe they don’t plan to continue with the Disco brand?
There's still plenty of scope for people who don't want FFRR or Sport levels of flash, but want better ride/economy than Defender gives.If the 90, 110 and 130 fulfill the role of the Disco and Disco Sport and they can create a model range that spans from the affordable end of the LR bracket up to sitting under/next to the Range Rover Sport then maybe they don’t plan to continue with the Disco brand?
David Grounds said:
JLR have just announced what should be a new Discovery.
A Land Rover (Defender) ought to be built like a Commercial Vehicle adaptable to any job required of it. Mod's go anywhere do anything, farmer's utilities, construction sites etc. etc.
They will sell, but JLR have ditched a market base.
you're dead right.A Land Rover (Defender) ought to be built like a Commercial Vehicle adaptable to any job required of it. Mod's go anywhere do anything, farmer's utilities, construction sites etc. etc.
They will sell, but JLR have ditched a market base.
camel_landy said:
J4CKO said:
camel_landy said:
J4CKO said:
I think DA is probably right judging by the number of RR products and other high end cars I see round here, there is more money about, think a lot is on finance but still need a decent wage coming in to support than.
Next door has a new Discovery, folks at the back have a Velar, RR Sport SVR next door but one they are everywhere, make me wonder what I am doing wrong
Ahhh... That's where my observations come in, regarding the devaluing/diluting of the brand. I too see a lot of Range Rovers about but I can also see a lot of them are very low spec.Next door has a new Discovery, folks at the back have a Velar, RR Sport SVR next door but one they are everywhere, make me wonder what I am doing wrong
The effect of this means the residuals in the second hand market will drop but if 'everyone' can afford one, it no-longer becomes an 'aspirational' brand. It may well be 'snobbish' but once the 'riff-raff' are driving around in Range Rovers, it looses it's exclusivity and as such, some customers will move elsewhere.
OK, so it'll be somewhat more nuanced than that but you get the idea.
M
Snip...
So they need volume to compete, what they are doing now is right, given the lay of the land and if they try to do what LR enthusiasts want they would end up like off road Bristols (Fnarr), the only qualification for getting a car should be whether you can pay for it, not whether the company likes the cut of your job or deems you a bit plebby for their products.
M
And so it begins.
Surely people don't fall for this s
t. What a fanny.
https://www.ebay.co.uk/itm/New-Land-Rover-Defender...
Surely people don't fall for this s
t. What a fanny.https://www.ebay.co.uk/itm/New-Land-Rover-Defender...
NomduJour said:
frozen-in-wiltshire said:
But robust workhorse, getting landrover a chunk of a global utility market, 'fraid not, sorry landrover.
They haven’t really competed in that market for a very long time, and the world is a very different place from when we knew the Empire and Commonwealth had to buy British products. They don’t have the global manufacturing facilities, the sales and parts networks, or the partnerships required to sell hundreds of thousands of low margin/high volume basic vehicles. It would have been nice to see a really basic version of a new Defender, but when companies with the global scale and reach of VW and Mercedes can’t make the sums work in that market, how were JLR going to?
Edited by NomduJour on Friday 13th September 12:52
In the end days of defender production, utilities and many other commercial buyers were buying loads of defenders and stockpiling them for their own use - there's a reason for that.
Now there is no domestic replacement that they can buy. Don't you think thats rather sad?
Anecdotally, I was on a shoot last year and the team wanted a photo - they all wanted to be photographed in front of - guess what - my green defender 90 - not the range rover, not the pickup truck, not the mercedes G, not the cayenne, says something doesn't it.
soxboy said:
The thing is, even the great white hope that is the Ineos Defender may still not be the salvation. Article linked below has various points including:
'BMW engines - either BMW’s 252bhp 2.0-litre turbocharged petrol, and BMW’s 261bhp 3.0-litre straight-six diesels'.
'The company is targeting a working audience, hoping to capitalise on the booming four-wheel-drive double-cab pick-up market, offering Projekt Grenadier as an alternative to the Volkswagen Amarok, Ford Ranger and Mercedes X Class'.
'Prices are yet to be officially announced, but INEOS has confirmed that it will “not be competing at the bottom end of the market.” Expect a starting price of around £30,000, climbing to around £45,000 for range-topping models'.
https://www.autoexpress.co.uk/land-rover/defender/...
Ineos are basically trying to cash in on "charm" to persuade people to spend premium money on a basic product. Yes, there is a small market, for a very lean company to perhaps break even selling a small number of products, but it ain't going to rewrite any rules if it ever gets to production.....'BMW engines - either BMW’s 252bhp 2.0-litre turbocharged petrol, and BMW’s 261bhp 3.0-litre straight-six diesels'.
'The company is targeting a working audience, hoping to capitalise on the booming four-wheel-drive double-cab pick-up market, offering Projekt Grenadier as an alternative to the Volkswagen Amarok, Ford Ranger and Mercedes X Class'.
'Prices are yet to be officially announced, but INEOS has confirmed that it will “not be competing at the bottom end of the market.” Expect a starting price of around £30,000, climbing to around £45,000 for range-topping models'.
https://www.autoexpress.co.uk/land-rover/defender/...
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