The decision last month to lay off 1000 contract staff out of a total 40,000 workforce may be a disaster for those affected but, on the face of it, it does not signal serious structural issues for Jaguar Land Rover’s business.
That said, although JLR has expanded at pace since its near-death experience after the credit crunch a decade ago, it is now facing a downturn in its fortunes.
In the year to September 2012, JLR sold 269,000 cars worldwide. In the year to March 2018, it sold 614,300. That’s impressive growth and backed by an expanded model line-up including strong sellers such as the Range Rover Velar and the F-Pace, Jaguar’s first SUV.
The top-line results for the fiscal year to March 2018 don’t look too bad, and in fact represent growth of 1.7%. However, the problem for the company lies in a marked fall-off in sales over the past six months of some of its most profitable volume models. It’s a fall-off that is most noticeable since the beginning of the year and showed no sign of slowing during March. Overall, JLR sales fell 3.8% year-on-year between January and March. But in March alone, sales were down 7.8%.
The company’s biggest issue is the UK market, where sales were down 21% in the first three months of the year and a worrying 26% in March alone. Sales in Europe were down nearly 12% between January and March. Across the rest of the world, however, company sales continue to grow. China, JLR’s second-biggest market so far this year, was up 11%.
Officially, the company blames its UK woes on consumer uncertainty over the future of diesel and the effect of Brexit.
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What JLR really need now is big investment in its dealer network. It's over stretched and unable to cope with the volume of cars sold. If they can't sort that out then people won't return. It's here that they are way behind the likes of BMW.
While >4 cylinder petrol engines are nice halo models, again if you look at the bulk of BMW sales it's still 4 cylinder petrol turbocharged engines in various states of tune. Only one 6 cylinder petrol engine now in a 3/5 series (excluding M) which is a real shame as those straight 6 petrols were the main reason for buying a BMW.
So if Jag want to compete with ze Germans, then unfortunately the market demands economical 4 cylinder cars. Of course they should still do their mad V8 R models.
For LR, well it's tough right now. SUVs rely on diesel for torque, and until hybrids and electric are good enough to drive heavy SUVs, then like everyone else they will need to tough it out. Although they haven't helped themselves with their poor transverse diesel implementation for EU6.
Aside from talking about
Aside from talking about Jaguar's perceived failings, I would say Land Rover have a lot to answer for here as well. It made me smile that the new Disco has sold so badly to date - it is an ugly thing and coming on to my second point....too expensive, like so much of the Land Rover range these days. People aren't going to pay £45k for a decent spec Freelander, sorry Disco Sport. New car prices have gone up across the board but the prices LR are charging, and have been for the last few years, are laughable and down right arrogant. As for Jaguar, I do think a couple of cars haven't been the success they hoped, like the new XE. However, I believe they have the right type of cars coming out to resolve that. LR by comparison have kept bringing out overpriced cars and some that aren't perhaps necessary to do so - Velar being the main one I can think of. Evoque convertible also actually - have seen just 2 since they came out. Arrogance and overcharging your customers only results in one thing. I don't blame Jaguar for JLR's challenges - Land Rover are creating them in abundance.
Aside from talking about
Aside from talking about Jaguar's perceived failings, I would say Land Rover have a lot to answer for here as well. It made me smile that the new Disco has sold so badly to date - it is an ugly thing and coming on to my second point....too expensive, like so much of the Land Rover range these days. People aren't going to pay £45k for a decent spec Freelander, sorry Disco Sport. New car prices have gone up across the board but the prices LR are charging, and have been for the last few years, are laughable and down right arrogant. As for Jaguar, I do think a couple of cars haven't been the success they hoped, like the new XE. However, I believe they have the right type of cars coming out to resolve that. LR by comparison have kept bringing out overpriced cars and some that aren't perhaps necessary to do so - Velar being the main one I can think of. Evoque convertible also actually - have seen just 2 since they came out. Arrogance and overcharging your customers only results in one thing. I don't blame Jaguar for JLR's challenges - Land Rover are creating them in abundance.