Jaguar: A Look Into The Leaping Cat's Future - Part 1

The Numbers

Brand/Company	Vol. %	Volume 2010	Volume 2009	DSR*%	DSR% 2010	DSR% 2009
Cadillac	34.68	146,925	109,092	35.56	480	354
Porsche	28.55	25,320	19,696	29.39	83	64
Infiniti	27.53	103,411	81,089	28.36	338	263
Acura	26.37	133,606	105,723	27.20	437	343
Audi	22.86	101,629	82,716	23.67	332	269
Land Rover	21.13	31,864	26,306	21.92	104	85
Mercedes-Benz	18.05	225,007	190,604	18.82	735	619
BMW	12.02	220,113	196,502	12.75	719	638
Jaguar	11.59	13,340	11,955	12.31	44	39
Lexus	6.18	229,329	215,975	6.88	749	701
Saab	-37.26	5,446	8,680	-36.85	18	28
Smart	-59.39	5,927	14,595	-59.12	19	47

Jaguar/Land Rover sold 232,839 vehicles worldwide in 2010, and in an era in which auto sales are down, money and credit are supposedly scarce, and big, gas-guzzling SUVs are said to have futures as bright as rectums, less than one-third of those sales were Jaguars.

As the world turns for JLR sales, so does the U.S.: Land Rover moved 31,864 units in 2010, Jaguar scooted a mere 13,340 off of lots. Of brands that are still alive today, only Smart and Saab sold fewer cars than Jaguar did in America last year – and Saab spent at least half of 2010 lying prone on an emergency room gurney wavering between 'clinically dead' and 'zombie.' For Jaguar, a company with the outstanding XF, thrilling XJ and massively gorgeous XK, that is a serious issue.

Look the other way, and there's practically an Astronomical Unit – that's 93 million miles – between Jaguar's American numbers and those of its German nemeses. Porsche did twice The Leaping Cat's business, Audi surpassed it by a factor of eight, and Mercedes-Benz and BMW each did 20 times Jaguar's sales.

The quaternary solution as laid out by Frank Klaas, Jaguar's global head of communications, is "new markets, new segments, new technology, new ideas." And there is a fifth element he did not mention: enough money to wallpaper Brazil.

Finbar McFall, global product marketing director for Land Rover, said there would be "40 significant product actions" for Jaguar/Land Rover in the next five years, funded by an annual expenditure of £1 billion ($1.65B U.S.) for product creation and supported by the hiring of 1,000 additional engineers.

New markets and new segments won't just be about brand new cars; maximizing the reach of Jaguar's current models is foremost on the agenda. For instance, "The XF has six percent of the European premium market, but 49% of [that segment] overall is four-cylinder cars," said Adrian Hallmark, Jaguar's global brand director. "Sixty to seventy percent of the German [competition] is four-cylinders. There is no XF four-cylinder, so we're locked out of half the market." Hence the new, 2.2-liter diesel.

It is a situation replicated across the globe. "In China," said Hallmark, "ten percent of luxury premium sales is eight-cylinders, 85-to-90% is six-cylinders, but Jaguar had no six-cylinder there." Order an XJ in China with the 5.0-liter V8 and you could pay £200,000, but "a V6 car with the same spec as that V8 is £100,000 due to [smaller] capacity taxes and other taxes." Hence the 3.0-liter diesel V6 that will be heading to China.

One more example: Hallmark said that 25 percent of the premium sedan segment in the U.S. is all-wheel-drive cars, and that Jaguar moves 70 percent of its metal in the snow belt – but the marque doesn't offer AWD. "This is about the ability to compete where the brand sells." Hence the... well, they didn't tell us how that one was going to go down, but we do know it's going to go down by 2013.

Those are gaps in the line that have made it a challenge for Jaguar to even defend its market share, never mind enlarging it, and that led Hallmark to characterize Jaguar not as a global brand but as a British brand that sells its wares overseas. "The internationalization of Jaguar is vital to grow our market share," he said in a separate interview. "We need to be more market specific in the cars we sell around the world."


The Future



Looking ahead, Jaguar describes a playing field that not only has tweaked models, but all-new ones like a production version of the C-X75 concept (above) that was just announced. Hallmark said "We need to launch different cars, new products in different body styles at lower prices," and "Look at what [the Germans] did and what we haven't done – in the next five years we have to catch up on everything we didn't do in the last 20."

The shift he has in mind is drastic enough that it will alter the placement of the cars Jaguar has right now. "We want to move each vehicle up," he said, "bring a whole new range of cars that sit where we are today."

Topside, that would mean "putting the XJ against the bottom of the Bentley Flying Spur." His pitch to that end: "We'll always be lighter and more agile than a Bentley." There will also be a top-tier offering that hasn't been seen in the range since 1996.

Nevertheless, it is arguably more important to have something down below. "Our cars start at £30,000 in the UK," he said, referencing the XF SE with the 2.2-liter diesel with a £30,095 base price, "but the segment beneath that price is four times larger." That makes a smaller Jaguar crucial.



We were assured that this would not result in some gluttony of greased-up product planning fornication, begetting so many new models and trim designations that customers need a dynastic flowchart and DNA kit to tell the family apart. "We're not looking to sell one million cars a year," we were told. "We wish to remain niche."

When pressed as to what kind of number he meant by "niche," and how Jaguar could stay niche and profitable, Hallmark told a story from his time at Bentley of a gent he called "Chuck from Newport Beach."

Before the Continental GT was introduced, "in Bentley focus groups we showed the car and people said 'That's not a Bentley.' But Chuck from Newport Beach said 'When I come to a stop sign and I'm in an S-Class and the other three cars at the intersection are all S-Classes, I wouldn't buy a Bentley, but one of them would.'" At the time, Hallmark said when it came to Bentley, "I can live with 25 percent of the S-Class market." In the U.S. last year, sales of the S-Class alone outdid Jaguar's total U.S. sales by about 300 units, the moral of the story for Jaguar being, "There's plenty of room to take off the top."

When any maker pledges to stay niche, talk of technology isn't far behind, with Hallmark acknowledging "increasing the use of aluminum structures and introducing hybrids" as part of the five-year plan. In the lead-up, partnerships such as the one with French firm Dassault Systemes will aid in 3D product-development tools.

And although Jaguar officially denies it, a number of since-retracted statements indicate that JLR is speaking to China's Great Wall about a venture there. The brand saw a 95-percent increase in sales in China alone last year yet does not have a tie-up with a local firm for production, and it sees "that's where the market opportunity really is." India, naturally, is another market ripe for increase.

Nor did Jaguar's presentation put any numbers to its sales ambitions beyond saying that we'll "start to see action" on the new model front in 2013, while AWD will also come in the next two years. But Hallmark, who spent nearly two decades at Porsche, Bentley and VW, did attempt to lay a foundation for the ambitions.

"We're in a better position now than Porsche was when I was there in the early 90s," he said, when he would have had the 964-model 911, 944 and 928 occupying forecourts for Porsche Great Britain in 1991. "Porsche was the 911 company, and since the 911 arrived Porsche didn't have two cars that did well in the market at the same time."

A compelling parallel... if only Jaguar had Volkswagen's money...


The Message



Or even VW's marketing budget. Hallmark said that Jaguar's global marketing allowance is smaller than VW's U.S. marketing budget (which is in turn, according to Hallmark, smaller than Toyota's marketing spend in California alone). We'd like to know how Jaguar is going to communicate all of this new product, and we're wondering how it will manage to blend its heritage message with a modern message in a way that's less wistful than reminders that "We built the E-Type."

Pulled off correctly, it will also require less memory loss, such as the humorous bit of Rip Van Winkle during the session when Ian Callum introduced the 2012 XK and XKR-S. His slideshow began with the 1948 XK120 and captioned its significance, "Beautiful lines." The next six slides were the 1957 XK150 ("Pure surfacing"), 1951 C-Type ("Muscular stance"), 1953 D-Type ("Exciting proportions"), 1961 E-Type ("Ground-breaking aesthetics"), 1966 XJ13 ("Perfect balance"), and the 1975 XJS ("Driven by aerodynamics").

The next slide: the C-X75 Concept ("Future vision") introduced at the 2010 Paris Motor Show. In effect, that meant 35 years of Jaguar history brushed off with, "Move along, folks, there's nothing to see here." And future vision needed to step back a further nine years to tie the C-X75 to the 1966 XJ13.



It is not that Jaguar should rid itself of the historical argument – the brand is only alive today because it has sold the automotive equivalent of sex, and accessible Englishness, to playboys and plutocrats round the world and those who wished to be like them. That is why, as Hallmark said, "People are receptive to the idea of Jaguars. In the marketplace, people want Jag to win."

But that is also why he added, "We just need to do more with it. Jaguar has a fantastic heritage and a very strong position in the market, but we're not as relevant, not as clear in the minds of consumers. The brand of tomorrow cannot just be the brand of yesteryear. "

Part of that is down to the incongruity of Jaguar buyers. "What is the Jag driver?" was Hallmark's rhetorical question. "You sit the three Jag drivers in a room and they all look at each other like, 'You drive a Jag?'"

No matter how many new, great models the brand introduces, it will need to come up with a coherent and consistent message to tie the shebang together – or else, buyers will keep asking that question of each other.

What's more, Jaguar is going to have to get that message to a group that might be even more important: its dealers who were leaving company offerings on the table, certain that customers didn't want them. In the U.S., according to Callum, "dealers said they didn't want the French Racing Blue" of the XKR-S. "I tell them 'Not the customer you have, but the customer you want.'" Sales of the Black Pack, which U.S. dealers also didn't want, have been more than double the estimates.

"Everyone," said Callum, "is going to have to come to the idea of the new Jag."

That idea involves incrementally yet comprehensively superior features, a few of which, as usual, can't even get a tourist visa to visit the United States. In Part 2, we'll break them down then take them for a ride.