Jaguar must fight its way to the front of the pack -- or die
 

http://www.detnews.com/2005/insiders.../C01-57808.htm

Wednesday, January 12, 2005

Jaguar must fight its way to the front of the pack -- or die

By Daniel Howes / The Detroit News
Daniel Howes

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The beginning of the last chance for Jaguar Cars Ltd. is sitting on an auto show turntable, promising two things the British marque has mostly failed to deliver during 15 years of Ford Motor Co. ownership -- credibility and sustainable profitability.

Officially, Jaguar says the "Advanced Lightweight Coupe" is a concept car, a "strong indication" of where Jaguar is headed and blah, blah, blah. Spare me.

The robin's-egg blue creation of designer Ian Callum is the actual production car, inside and out, that will replace the current XK sports coupe little more than a year from now. Done right, it should open a new chapter for a brand that stands as the automotive poster child for unfulfilled promise (alongside, perhaps, General Motors Corp.'s Saturn division).

Jaguar, to borrow a racing metaphor, is on its last lap. Ford Chairman Bill Ford Jr. insists Jaguar must earn its way after consuming billions of Ford's precious capital; Jag's regional boss, Premier Automotive Group Chairman Mark Fields, admits the painful restructuring of Jaguar, including the closure of its Browns Lane plant, should have been done years ago.

He's right, of course. No other auto company builds 120,000 cars in three plants, especially in high-cost Britain. What if this latest turnaround plan doesn't work and Jaguar misses its targets, Ford director Irv Hockaday asked Fields during a recent business review?

The answer: Ford would be forced to shift Jaguar into exit mode -- and that doesn't mean dressing it up so it can be sold to some other sucker.

Jaguar has enormous staying power considering the punishment it has endured, much of it self-inflicted. It walked away from its roots as a builder of affordable sports cars in the 1960s and became a purveyor of expensive, stodgy sedans whose reputation for dodgy quality continues to haunt Jaguar, even if it is undeserved.

Then, pushed to embrace modernity and higher production volumes as a new member of the Ford family, Jaguar pronounced itself in a turnaround mode but clung to retro designs, a quaint post-war image and a bloated organization.

The combination mostly doomed the brand to life as a cash-eating also-ran in a world dominated by Audi, BMW, Cadillac, Lexus and Mercedes-Benz. Now Jag has to fight its way forward from the back of the pack or die.

That's why the coupe sitting on the floor of the North American International Auto Show is so important. Its front grille, rear window and hood pay homage to the E-Type, but its broad shoulders, aluminum frame and tailored interior embrace 21st-century global automotive trends.

Ford needs a healthy Jaguar to make its Premier Automotive Group of Jaguar, Land Rover, Volvo and Aston Martin work. That's especially important because Lincoln cars and trucks, for the foreseeable future, promise to be little more than gussied-up blue-oval Fords.

Ford thought it was buying a generator of premium profits when it paid some $2.5 billion for Jaguar. Fifteen years on, it's still waiting.

Auto companies are fixable and, Lord knows, I hope Jaguar can be fixed because I'm a fan. But if it doesn't work this time, Ford, pull the plug.

Daniel Howes' column appears Sundays, Wednesdays and Fridays. He can be reached at (313) 222-2106 or at dchowes@detnews.com.

I'm not so sure I agree with Dan Howes' reasoning here. It's always a good idea, of course, for ways to be found to increase quality and efficiency, but Jaguar is and always has been a niche and rather inefficient automaker....it is not SUPPOSED to be like companies that sell half a million Camrys, Accords, or Tauruses a year to the masses. If it did it wouldn't be JAGUAR. Ford knew this back in 1989 when they bought the company in the first place.............this idea that Jag has to get to the front of the pack or die is nonsense. The truth is that it is going to do neither....but I partially agree that some efficiency changes are going to be made. We have already seen some on the sharing of Ford and Jaguar platforms.
However, if Ford DOES decide to pull the plug, I don't believe for one second that Jag will die. Unlike by-gone Plymouth and Oldsmobile, Jag has a core of wealthy and discriminating customers that are quite loyal. If they cannot make it on their own (and it is quite possible that they will) , some other company will almost surely buy them out.

Frankly, Mike.............I think we are going to see Isuzu die out before Jag...at least in the American market. Now, THERE is a company in REAL trouble.

Do u want to start another thread on Isuzu? That would be cool.
Well Ford has had Jag 15 years and well, they simply are an also-ran now. Today, what does Jaguar stand for? I was a Jag fan as a kid, today, I don't know. It's not all out luxury, its not the best looking cars, its not the best performance cars. The x-type has done nothing for the brand here in the USA, it has doubled sales but still much less than expectations. We hardly mention the XJ or S-type here. The XJ is the best car but they made the styling so much like the old one, you can't tell the difference unless you are a true Jag fan.
On top of that, Ford will never build a Jag SUV b/c Lincoln has that as does LR. That is huge cash cow missing.

I did a thread several months ago in the CAR CHAT column on what our opinions were as to who would be the next company to fold in the American market, remember? The opinions mostly centered around Mitsubisbi, Isuzu, and Lincoln-Mercury. You yourself made some posts on it.

Back to Jag.......I'm not saying it the company doesn't have any faults.....it certainly DOES. Quality control and vehicle reliability, while somewhat better than 15 years ago.......especially with those awful Lucas electronics.......is still consistantly below average across the board, according to Consumer Reports. The cars, to some extent IMO cost more than they are worth.
Some of them depreciate quite rapidly. But my point was that in spite of their faults they have a core group of rich, loyal customers.....people with MONEY. For instance, Jack Kent Cooke...the late multi-billionaire and owner of the Washington Redskins, bought a beautiful XJ coupe for his young Latin wife. (This car later became famous as the car where she had the young man on the hood in Georgetown....probably the reason she got locked out of his will). Some of you may remember that story.

Funny, I was thinking earlier today about starting a thread concerning Ford's brands and their supposed niches. It was sparked by an article I saw saying that the new Lincoln Aviator is going to be a barely-upmarket version of a Mazda SUV, with the implication that Ford has given up on Lincoln as an actual luxury competitor.

So maybe they want to leave Jaguar alone up there in their brand line-up? But where does that leave Mercury and Lincoln? They both seem to be drifting aimlessly with no discernible brand differentiation. Volvo has its niche as a safety machine, but that's simply not enough in today's marketplace to really stand out. Mazda has come out with some attractive vehicles, but I don't know if that has translated to increased sales (or profits).

Ford itself has gotten some good reviews recently for their two do-or-die products: the F-150 and Mustang. But the Five Hundred is another lackluster effort, the Focus is long in the tooth, the Taurus is coasting, and their minivans clear also-rans.

Does Ford have a $30K model in every brand they own? It sure seems like it, so what really sets Jaguar apart from Ford, or Volvo from Mercury? What's their Olds, that is, which brand do they need to retire to make room for the rest?

When I was growing up, my perception of Jaguar was that it was some specialty company that catered to the rich and was above most of the other "common luxury car companies". I think Jag sealed their own fate when they introduced the S Type with a V6 and the X type altogether. They've known they can't move mass volume so they should have done what Aston does. Build a few, beautiful, powerful cars that are head and shoulders above the competition. Instead they take Ford chassis, introduce a $30,000 car, make an "in between" sedan with a V6 that is constantly beaten by the competition and wonder why they're slipping?

The XJ and XK in both base and "R" variants are amazing, beautiful cars with supple interiors, classic J shifters and an aura about them that conveys power and grace. Just for their sakes it would be sad to see Jag go.

James

I agree..I certainly wouldn't like to see them go either, but see my earlier posts....I don't think you'll have to stay up at night worying about that.....they DO have a loyal, stable (and RICH), if somewhat small, customer base...and that base has expanded a little with the S and X-series cars....especially with the X's AWD for foul weather.
Now....here's where I disagree, Jim...but this is just a matter of personal and differing tastes between us. I see you like the J-Shifter...IMO it ranks down there with Chris Bangle's I-Drive.
I also don't care for the zig-zag shifters you see in so many cars today....I liked the older straight front-back push-pull ones.

1SICK....I probably went a little overboard in my reply to your post here. I'm sorry....I did not mean to say that either your opinion or Dan Howes' here is nonsense. You both are well-versed auto writers. I just think , though, that some of the doomsday stories of Jag being ready to go under are just a little overblown, that's all. The company today, even as a rather niche company, produces a wider range of vehicles than ever before and appeals to more people besides its small traditionally rich aristocratic base. The X-class, with its AWD, has taken care of the RWD foul-weather problem, and even a hatchback / wagon version of it is set to debue to appeal to the more-practical crowd.

No offense taken at all dude. :) Yeah, it takes a lot to kill a car company.

http://www.autoweek.com/article.cms?articleId=101447

2004 Jaguar XJ8: Wrap-Up
The Love Test: Shoddy Service And Spotty Reliability Did Not Dampen Our Fondness For XJ8

ORIGINAL STICKER PRICE: $66,770
TRADE-IN VALUE: $33,900 (kbb.com)

in 1 year, it lost 50% of its value? This cannot be right?

Next XK picshttp://forums.autoweek.com/servlet/J...8747_image.jpg http://forums.autoweek.com/servlet/J...8746_image.jpg

Jaguar's Advanced Lightweight Coupe concept debuted in Detroit.
No quick fix for Jaguar's financial woes; recovery plan to be driven by new products
BRADFORD WERNLE | Automotive News Europe
Posted Date: 1/20/05


Jaguar may not turn a profit for several years, the company's top executives say.

"It's not a short-term fix," said Mark Fields, chairman of Premier Automotive Group, the Ford Motor Co. unit that encompasses Jaguar, Land Rover, Volvo and Aston Martin. "I'm not saying we're going to break even in 2006, 2007 or even 2008. What I want is sequential improvement in terms of financial performance."

Fields blamed the British brand's problems on:
>>> An increasingly competitive environment as incentives move into the luxury sector.
>>> A weak American dollar.
>>> A shift in the luxury segment from sedans and sports cars to SUVs and crossovers.

Ford does not report Jaguar results separately. In British regulatory filings, Jaguar reported that in 2003 it lost £601 million, or about $1.1 billion at current exchange rates, on its United Kingdom operations. The filings do not include overseas subsidiaries.

Jaguar said in the filings that it would lose money in 2004 and 2005.

Ford has agreed to pump more money into Jaguar, but no amounts have been specified. In September, Jaguar told of a restructuring plan that included closing its assembly plant at Browns Lane in Coventry, England, with a loss of 1,150 jobs.

Production of the flagship XJ sedan will move to the nearby Castle Bromwich plant in Birmingham, England, this summer. In January 2006, Jaguar will begin producing the next-generation XK sports car in Castle Bromwich. The mid-sized S-Type sedan also is made in Castle Bromwich.

Jaguar has abandoned its goal of making 200,000 cars a year. Last year it produced about 120,000. The restructuring plan also calls for reducing inventory and steering clear of heavy incentives.

The recovery plan will be driven by new products, executives say. Jaguar introduced a concept car at the Detroit auto show, the Advanced Lightweight Coupe, that previews the next XK.

The 2+2 coupe is a step away from Jaguar's reputation as a "wood and leather" brand. Like XKEs from the 1960s, the concept features aluminum interior trim. There is no wood.

Joe Greenwell, CEO of Jaguar-Land Rover, said the company wanted to present a concept car in Detroit to show that it has a viable future. The Advanced Lightweight Coupe concept, styled by Jaguar design director Ian Callum and a small team, was designed and built in three months.

http://www.autoweek.com/news.cms?newsId=101615

Interesting thread, guys...

I have nothing to add except that my brother-in-law has an S-Type with 3-Liter six and manual tranny.

Within 2 months of delivery the fuel pump failed and left him stranded. That was just the start of his headaches.

Now you could say that Jags are "just that way" and "that's how they are" but CRAP MAN LEXUS DOES IT JUST FINE. There's no excuse in this day and age to build something so poorly especially considering that Toyota is inviting us into their plants showing us how they can make 100% reliable cars and STILL turn a profit. :egads: Not to mention world domination. ;)

As interesting a competition it is on paper to see the three German, Japanese, Cadillac, Jaguar, etc. attempt to battle each other on all fronts, I wonder if the current lesser players would be better served picking their own niche. Cadillac has done well with its CTS and STS, but should they abandon the current position filled by the DTS just to fight in the flagship lux segment? Does Acura really need to build a V8 and larger flagship sedan? Was it really the right move for Jaguar to come downmarket with its X-Type? I wonder how much room there really is at the table for 8 or so "sport luxury" companies.

Anyway, I think the smarter companies will continue to straddle the line between traditional 3/5/7 segments. Cadillac's CTS and Infiniti's G35 are classed as 3-series competitors, but they're rather large for the class. If Acura really isn't going to build a larger flagship, they might as well have made the RL a bit larger, to continue to straddle the 5/7 line. Jaguar, well, I don't know if retreating upmarket is the best move now, but they need to emphasize the luxury section in most of their cars and leave the sporty aspirations for the XK. AWD and SUVs are where the current market is, but neither really fits into their brand image. Oh well. Perhaps partnering with Land Rover would be their best bet. Want British build quality? Come to Jaguar/Land Rover. Want an SUV? See the Land Rover section. Want the luxurious car? See the Jaguar section.

Solid post. Yes, Acura has done very well and Infiniti seems to do well going into niches. Because as you stated, the luxury market is just too saturated, for those going head on with the big dogs. Audi is a very solid car and just has average sales at best for instance. I agree, the X-type should not have happened. They traded their soul for sales. And will be paying for a long time for it.

IMO, Jag should supply us with beautiful cars, coupes and sedans, and be rather upmarket. If Benz can have the E/CLS/S why not Jag? They are just not using their imagination. They are still stuck in the "glory days" mentality.

Even BMW has a SUV. Benz has one. Jag doesn't. If Jag supplied us with very sporting cars, with true manuals, they could really take a BMW approach to things.

I missed your post Iceman. I agree, they have saturated themselves and don't differentiate enough to buyers. Mazda is doing well though, really turning things around.

Yeah, great idea for Jaguar to do things like CLS, etc. I can buy the CLS as an MB product, but it almost would make more sense to me as a Jag.

BTW, I think I posted earlier that Automobile mag had in its Feb issue an interview with some Jag guy, who not only said that AWD would come to more of their vehicles, but also hinted very strongly at an upcoming SUV. In a way, I really feel this is a bad move. Yes, they, like Saab, needed an SUV, but I don't think all brands must be all things to all people. Ford owns both LR and Jag. Partner them, it makes so much sense. Both have dodgy build quality and reliability, and both are exceedingly British. Keep them upmarket, maybe get rid of the X-type and Freelander, and market them together.

As for BMW, MB, Audi, Lexus, etc., they can stay at the head of the table. At this point, Lincoln would be better served as a slightly downmarket luxury brand, and Acura would be better off continuing to straddle the class lines (IMO), as I posted above. Everyone wants to be where Benz and BMW are, and they probably use Lexus as an example of being able to come from behind (or nowhere) and be extremely close to matching the Big German Two. If they all do that, it's fine for me as a consumer. We can look to the E90 release for evidence, as articles have mentioned how BMW has to keep prices down because of the CTS and G35, etc. nipping at its heels. But in terms of their own profit lines, for their sakes, I feel the near-ran auto sport/lux companies should take a different angle than just, "Here we are, exactly like the Germans, except not quite." If I'm choosing between a German car and a car that's trying to market itself as a German car, I wonder which I'm going to pick. Again, it's not to say that they're not being reasonably successful at out-Germaning the Teutonic Duo. Huge strides have been made, sales for these companies are up, and their performance aspects are great at lower prices. However, I just wonder how sound and viable a long-term marketing strategy it's really going to be in the end.

Lastly, going along with the Cadillac re-alignment talk, and still somewhat on-topic, I realized that I actually no longer think Cadillac should reposition the DTS in 2010 as a 7-series/LS/S-class competitor. Maybe come out with a new model, like the UTS, to do that, but there is clearly a market, at least in America, for a large, FWD, relatively inexpensive lux car like the DTS and Town Car. It'd be a shame if Cadillac (and Lincoln) gave up their brand cars to reposition themselves in an imitation war that they cannot ultimately win.