Bolloré may kill off Disco Sport, XJ, XE, XF...
Discussion
From yesterday's Sunday Times. Thierry Bolloré is to announce a radical shake-up of JLR nameplates:
Jaguar Land Rover’s new boss could slash the car-maker’s product range — even ditching its forthcoming electric XJ saloon.
Former Renault chief executive Thierry Bolloré is believed to be mulling deep cuts to its line-up, with up to six current and planned models facing the axe.
Bolloré, who replaced Sir Ralf Speth last month, is grappling with an array of issues at Britain’s biggest car-maker, from the economic slump to a confused mix of similar models. He also inherited a range of poor-selling Jaguar saloons.
Bolloré is understood to be considering halting the XJ, despite JLR and its suppliers having spent tens of millions of pounds on tooling for the new car. It has limited sales prospects, with Jaguar hoping to sell 38,000 a year. Bolloré, 57, is considering ditching two more models — a Range Rover and a Jaguar SUV — that were due to be built on the same platform, or skeleton.
Also at risk are its Jaguar XE and XF saloons, sales of which have disappointed, and its Discovery Sport SUV, with similar characteristics to a number of its other SUVs. That raises questions over JLR’s Castle Bromwich and Halewood plants.
Model cuts would be a significant diversion from Speth’s strategy. The Bavarian was hired by Tata to turn round Jaguar after the Indian conglomerate bought the car-maker from Ford for £1.1bn in 2008.
Jaguar Land Rover’s new boss could slash the car-maker’s product range — even ditching its forthcoming electric XJ saloon.
Former Renault chief executive Thierry Bolloré is believed to be mulling deep cuts to its line-up, with up to six current and planned models facing the axe.
Bolloré, who replaced Sir Ralf Speth last month, is grappling with an array of issues at Britain’s biggest car-maker, from the economic slump to a confused mix of similar models. He also inherited a range of poor-selling Jaguar saloons.
Bolloré is understood to be considering halting the XJ, despite JLR and its suppliers having spent tens of millions of pounds on tooling for the new car. It has limited sales prospects, with Jaguar hoping to sell 38,000 a year. Bolloré, 57, is considering ditching two more models — a Range Rover and a Jaguar SUV — that were due to be built on the same platform, or skeleton.
Also at risk are its Jaguar XE and XF saloons, sales of which have disappointed, and its Discovery Sport SUV, with similar characteristics to a number of its other SUVs. That raises questions over JLR’s Castle Bromwich and Halewood plants.
Model cuts would be a significant diversion from Speth’s strategy. The Bavarian was hired by Tata to turn round Jaguar after the Indian conglomerate bought the car-maker from Ford for £1.1bn in 2008.
Land Rover have got their brand position sorted (Land Rover for premium practicality, Range Rover for luxury) but they still have too many models.
There’s no need for the Evoque and Velar and Sport in the RR lineup - I’d expect one to get culled.
The Discovery Sport serves a useful role in the £30-40k practical SUV market (vs. XC60, Q5, X3 market).
The Evoque has been a great success because it gave access to the Range Rover brand for £35k - for that exact reason it’s a problem if you then want to your full fat model to be considered an alternative to Porsche, Bentley, Aston, and possibly Rolls.
I think LR end up with 5 models
1. £30-40k quasi-practical SUV; small but with 7 seat option, competing against XC60, Q5, X3, GLC, etc. I’d say Land Rover brand (Discovery sport, or maybe Evoque)
2. £50-70k premium family practical full size, 7 seat option; competition XC90, X5, GLE, Q7, Touaraeg. Probably LR brand. (Discovery)
3. £60-80k+ smaller premium (faster?) luxury model; competition Cayenne, Q8, maybe X6/GLE coupe. Probably Range Rover brand. (Merge the
4. £100k+ Luxury model; compete with X7 and GLS on the one hand, and Bentayga/DBX/Cullinan on the other (plus S-Classes etc.). Range Rover brand.
5. Defender. “Halo” model - brand-building appeal to purists. Push premium and try to take some G-Wagen sales.
Jaguar is a much more confused brand. Where do you take it?
Option 1: “Sporty” - more driver focussed, purer. The heritage is there, but Trouble is to do that you’d need to have cars that can dynamically keep up with Porsche, and shed the pipe-and-slippers image. You’d need to get rid of the saloons and big-selling SUVs and build 2x sports cars (something in £50-70k range, and something in £80-100k) before the image would be credible. Very high risk.
Option 2: A more radical (but sensible) option would be to make the brand 100% EV, and run like Polestar. It’d avoid confusion with LR/RR models (which are likely to be ICE/PHEV for some time), and try and get in on some of the Tesla action.
There’s no need for the Evoque and Velar and Sport in the RR lineup - I’d expect one to get culled.
The Discovery Sport serves a useful role in the £30-40k practical SUV market (vs. XC60, Q5, X3 market).
The Evoque has been a great success because it gave access to the Range Rover brand for £35k - for that exact reason it’s a problem if you then want to your full fat model to be considered an alternative to Porsche, Bentley, Aston, and possibly Rolls.
I think LR end up with 5 models
1. £30-40k quasi-practical SUV; small but with 7 seat option, competing against XC60, Q5, X3, GLC, etc. I’d say Land Rover brand (Discovery sport, or maybe Evoque)
2. £50-70k premium family practical full size, 7 seat option; competition XC90, X5, GLE, Q7, Touaraeg. Probably LR brand. (Discovery)
3. £60-80k+ smaller premium (faster?) luxury model; competition Cayenne, Q8, maybe X6/GLE coupe. Probably Range Rover brand. (Merge the
4. £100k+ Luxury model; compete with X7 and GLS on the one hand, and Bentayga/DBX/Cullinan on the other (plus S-Classes etc.). Range Rover brand.
5. Defender. “Halo” model - brand-building appeal to purists. Push premium and try to take some G-Wagen sales.
Jaguar is a much more confused brand. Where do you take it?
Option 1: “Sporty” - more driver focussed, purer. The heritage is there, but Trouble is to do that you’d need to have cars that can dynamically keep up with Porsche, and shed the pipe-and-slippers image. You’d need to get rid of the saloons and big-selling SUVs and build 2x sports cars (something in £50-70k range, and something in £80-100k) before the image would be credible. Very high risk.
Option 2: A more radical (but sensible) option would be to make the brand 100% EV, and run like Polestar. It’d avoid confusion with LR/RR models (which are likely to be ICE/PHEV for some time), and try and get in on some of the Tesla action.
I think Jaguar has been living on borrowed time for quite a while now. I do like their models and will probably look at a XF Sportbrake as my next car but they always seem around a generation or two behind the Germans.
From what I can gather the only models making serious money are the RR & RRS. The Slovakia plant seems like a massive waste of money unless they plan on shifting all production over there eventually. I guess it was conceived when both Halewood and Solihull were running at full capacity though.
I wish them look as the Range Rover is a phenomenal product but I don't think their brand it being helped by the massive range of similar models.
From what I can gather the only models making serious money are the RR & RRS. The Slovakia plant seems like a massive waste of money unless they plan on shifting all production over there eventually. I guess it was conceived when both Halewood and Solihull were running at full capacity though.
I wish them look as the Range Rover is a phenomenal product but I don't think their brand it being helped by the massive range of similar models.
I think it’s more likely that ‘the’ Discovery is at risk, not the Discovery ‘Sport’. Sales of the Discovery Sport are high as are the Evoque, they’re the bread and butter models. The high earners are the Range Rover and the Range Rover Sport.
Sales of the Discovery were low anyway, partly due to the controversial rear end and now they’ve fallen through the floor as the Defender has arrived (the similar characteristic vehicle) and everybody who wanted a new Discovery 4 is buying a Defender.
Sales of the Discovery were low anyway, partly due to the controversial rear end and now they’ve fallen through the floor as the Defender has arrived (the similar characteristic vehicle) and everybody who wanted a new Discovery 4 is buying a Defender.
Ditching an all electric model seems a backwards step- electric is obviously the long term future, so makes sense to gain a foothold and develop that sector now. I don’t know what the sales figures and profit margins are on each model, but LR/RR is obviously the stronger side of the business.
XE sales have been very disappointing, so perhaps this should be the first to go, along with the XF. Conventionally powered saloons are a declining sector and the Germans have too strong a hold on it. Keep the F-Type and SUVs. The I-Pace shows Jaguar have something worthwhile to offer, they can be up there is they focus on high-tech and being distinctive. Perhaps repositioning as a British Tesla/Polestar might be better than going toe to toe with BMW/Merc etc? Can see Slovakia possibly taking production from some of the UK plants in order to save money.
XE sales have been very disappointing, so perhaps this should be the first to go, along with the XF. Conventionally powered saloons are a declining sector and the Germans have too strong a hold on it. Keep the F-Type and SUVs. The I-Pace shows Jaguar have something worthwhile to offer, they can be up there is they focus on high-tech and being distinctive. Perhaps repositioning as a British Tesla/Polestar might be better than going toe to toe with BMW/Merc etc? Can see Slovakia possibly taking production from some of the UK plants in order to save money.
WonkeyDonkey said:
I think Jaguar has been living on borrowed time for quite a while now. I do like their models and will probably look at a XF Sportbrake as my next car but they always seem around a generation or two behind the Germans.
From what I can gather the only models making serious money are the RR & RRS. The Slovakia plant seems like a massive waste of money unless they plan on shifting all production over there eventually. I guess it was conceived when both Halewood and Solihull were running at full capacity though.
I wish them look as the Range Rover is a phenomenal product but I don't think their brand it being helped by the massive range of similar models.
This is a good thought.From what I can gather the only models making serious money are the RR & RRS. The Slovakia plant seems like a massive waste of money unless they plan on shifting all production over there eventually. I guess it was conceived when both Halewood and Solihull were running at full capacity though.
I wish them look as the Range Rover is a phenomenal product but I don't think their brand it being helped by the massive range of similar models.
Perhaps they
- Kill the Full Fat Discovery 5, leave the Defender to pick up the practical £50-70k segment and compete with the XC90 etc.
(This would then open up the opportunity to re-brand the Discovery Sport as just ‘Discovery’, which probably does it no harm)
- Retain the RRS as a premium luxury competitor to Cayenne, GLE, X5, in the £60-80k segment
- Kill the Evoque and Velar
They’d go from 7 models to 4, so decent rationalisation. Plus killing F-Type and E-Pace.
Fusion777 said:
XE sales have been very disappointing, so perhaps this should be the first to go, along with the XF. Conventionally powered saloons are a declining sector..................
I think the 3 series and 5 series are doing OK? I've always thought that Jaguar keep shooting themselves in the foot with their pricing and marketing strategy as well as falling down on some tech.
The XF and XE are worthy products that the press have always said drive well and looks are OK too.
However the base models look cheap and nasty and to spec either car up to look more sporty and attractive - to compete with the M Sport - is prohibitively expensive, especially when depreciation is also taken into account (which then affects their ability to get competitive lease deals).
Configuring a car with a six-cylinder engine is a massive uplift in cost and looks poor value.
The in car technology is rubbish in comparison with BMW / Merc with low res slow responding screens with a terrible user interface. There's no excuse for this as to get this right is simple User Interface design - there's loads of talent out there to get this right.
If they had their pricing more competitive, the model line up such that the Sport models and configurations were more affordable and fixed up the in car tech I think these models would have sold much better. I don't understand how they can't see this for themselves.
It's probably too late now - I suspect the XE in particular is doomed.
The recent XE facelift is great- it's the car that it should have been first time around. Problem is, it's taken them 5 years to get there, and in the meantime, Audi released a new A4, BMW released their new 3, and Merc facelifted the C-Class, with a new model due next year.
As someone stated earlier, it's like they're a generation behind with many of their products. Surprised people are wanting to take out the Evoque and Velar, though, They seem to be big sellers, and must be a cash cow. They are aspirational products, in the way that an XE or XF aren't.
As someone stated earlier, it's like they're a generation behind with many of their products. Surprised people are wanting to take out the Evoque and Velar, though, They seem to be big sellers, and must be a cash cow. They are aspirational products, in the way that an XE or XF aren't.
LR: We know that the new FFRR is going to to up in price and luxury. I think base will be 100kish, means the RRS will probably increase to start more like 80k with more space for the Velar and Evoque. All of these sell well. I think the LR bit will then become 2x models, Defender and Disco Sport - which I think will become a cheaper, more basic, Defender in time. Disco goes.
Jag: I imagine the XF and F-Type will go quite quickly, sadly, you see very few new ones in the wild. Same for the E-Pace.
I think the XE and F-Pace will remain until the end of this post facelift cycle, four or five years.
Future for jag is electric but they can't take their foot off the pedal, they were surprisingly far ahead with the IPace and it would be their death knell if they don't strive to capitalise on this - everyone else is catching up and going past...
Jag: I imagine the XF and F-Type will go quite quickly, sadly, you see very few new ones in the wild. Same for the E-Pace.
I think the XE and F-Pace will remain until the end of this post facelift cycle, four or five years.
Future for jag is electric but they can't take their foot off the pedal, they were surprisingly far ahead with the IPace and it would be their death knell if they don't strive to capitalise on this - everyone else is catching up and going past...
The Range Rover brand seems pretty solid. The Evoque, RRS and RR sell well over a range of key markets. Possibly the Velar is at risk as despite being rather nice it doesn’t seem to carve its own strong niche like the Evoque and RRS did when they appeared.
The LR range is quite tricky. The DS seems quite popular and is the biggest selling LR product. The Disco itself, once brought in to fill the void between the very agricultural Defender and the very expensive Range Rover has arguably lost its purpose upon the arrival of the new Defender.
If I had to chose two LR models for the chop they might be the Velar and the Disco.
Jaguar is really difficult though. The brand image hasn’t transitioned and it might not ever. The cars are good but not enough people want them. Going EV isn’t going to get them any new volume anytime soon. It’s a good idea but I wonder if too much damage has been done. I wonder if they won’t solve the Jaguar problem by speeding up the selling off of the whole of Jaguar. It has only been kept going because Ratan Tata loves Jaguar and he is getting old now and having to make concessions.
The LR range is quite tricky. The DS seems quite popular and is the biggest selling LR product. The Disco itself, once brought in to fill the void between the very agricultural Defender and the very expensive Range Rover has arguably lost its purpose upon the arrival of the new Defender.
If I had to chose two LR models for the chop they might be the Velar and the Disco.
Jaguar is really difficult though. The brand image hasn’t transitioned and it might not ever. The cars are good but not enough people want them. Going EV isn’t going to get them any new volume anytime soon. It’s a good idea but I wonder if too much damage has been done. I wonder if they won’t solve the Jaguar problem by speeding up the selling off of the whole of Jaguar. It has only been kept going because Ratan Tata loves Jaguar and he is getting old now and having to make concessions.
brickwall said:
The question is to whom is Jaguar worth more than it is currently worth to JLR?
Who would buy it as a standalone entity? As a bare minimum you’d need an engine deal, but that doesn’t help much with the $$$$ needed for EV investment.
It’s quite hard to answer with UK centric spectacles on. If we asked the same question back in 2008 it would have been hard to see who would want Jaguar but someone did. Of course Ford needed to sell and they had to throw in LR to sweeten the deal but a buyer was found. Who would buy it as a standalone entity? As a bare minimum you’d need an engine deal, but that doesn’t help much with the $$$$ needed for EV investment.
We are arguably in a very similar position again. Jaguar isn’t doing brilliantly and the parent has gone from JLR being a vital revenue machine through which it has been able to meet its Group debt obligations and stave off a capital restructuring to potentially being a cash drain. In many ways, TATA may be very close to needing to divest JLR for pretty much the same reasons Ford had to. A clue may lie in how much say TATA’s creditors took in this new appointment.
In reality we know JLR is quietly up for sale. They’ve been forced into being quite overt about Jaguar and anyone buying that would probably demand LR thrown in.
Who would buy it? Someone looking to build a new automotive group, an existing automotive group wanting to grow critical mass or break into premium.
As to whether what they put on the table being worth more than JLR is to TATA, I think the clock is ticking on that one and we may even be at that crossover point. Anyone interested in having a pop would arguably be sniffing around now, in the current market. But it may be that there’s so much blood in the water at the moment that there are better automotive deals to be had?
DonkeyApple said:
brickwall said:
The question is to whom is Jaguar worth more than it is currently worth to JLR?
Who would buy it as a standalone entity? As a bare minimum you’d need an engine deal, but that doesn’t help much with the $$$$ needed for EV investment.
It’s quite hard to answer with UK centric spectacles on. If we asked the same question back in 2008 it would have been hard to see who would want Jaguar but someone did. Of course Ford needed to sell and they had to throw in LR to sweeten the deal but a buyer was found. Who would buy it as a standalone entity? As a bare minimum you’d need an engine deal, but that doesn’t help much with the $$$$ needed for EV investment.
We are arguably in a very similar position again. Jaguar isn’t doing brilliantly and the parent has gone from JLR being a vital revenue machine through which it has been able to meet its Group debt obligations and stave off a capital restructuring to potentially being a cash drain. In many ways, TATA may be very close to needing to divest JLR for pretty much the same reasons Ford had to. A clue may lie in how much say TATA’s creditors took in this new appointment.
In reality we know JLR is quietly up for sale. They’ve been forced into being quite overt about Jaguar and anyone buying that would probably demand LR thrown in.
Who would buy it? Someone looking to build a new automotive group, an existing automotive group wanting to grow critical mass or break into premium.
As to whether what they put on the table being worth more than JLR is to TATA, I think the clock is ticking on that one and we may even be at that crossover point. Anyone interested in having a pop would arguably be sniffing around now, in the current market. But it may be that there’s so much blood in the water at the moment that there are better automotive deals to be had?
My bet is that it doesn’t go trade and instead would be a private buyer - there’s lots of capital looking for a home right now
Trade
- I can’t see any of the European automotive groups wanting it - they either have their own premium offering (Germans, & Exor) or have their own problems (French)
- On the US side, I doubt Ford want it back, and GM are retreating from Europe
- Would there be trade suitors from the Far East? Honda and Nissan have their own premium brands in the US; but I could see Kia/Hyundai potentially having a sniff to bolster their premium offering (and give a boost to Genesis) if the price was right
Private
- If the price was right then I could see a world where a relatively long-term fund takes it - Blackstone etc.,
- I wouldn’t exclude Lawrence Stroll having a look with a potential view to integrate with AM
It’s shocks me that LR don’t have a small product to rival the 1 series size cars, even the E pace is much more expensive. It worked for Mercedes Audi and BMW bringing in a Premium hatchback or small SUV. I would have thought it would sell well
Quite right that there’s too many models though. I doubt they will axe the evoque that’s the one I see the most. But still never as many as I see Q3s or GLCs.
Quite right that there’s too many models though. I doubt they will axe the evoque that’s the one I see the most. But still never as many as I see Q3s or GLCs.
Nickbrapp said:
It’s shocks me that LR don’t have a small product to rival the 1 series size cars, even the E pace is much more expensive. It worked for Mercedes Audi and BMW bringing in a Premium hatchback or small SUV. I would have thought it would sell well
Quite right that there’s too many models though. I doubt they will axe the evoque that’s the one I see the most. But still never as many as I see Q3s or GLCs.
The problem is that it is a volume and funding game. Mercedes has form as they have an enormous commercial market that is built completely on being able to churn out huge numbers and fund the rental of them to consumers via market competitive debt. Conversely, JLR has never done high volume and can’t fund consumer debt efficiently. It’s partly why the XE hasn’t worked. They can get the margins down on the production or the debt cheaply enough to be able to smash their way into the fleet market and take any viable, sustainable share. Quite right that there’s too many models though. I doubt they will axe the evoque that’s the one I see the most. But still never as many as I see Q3s or GLCs.
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