Jaguar should be doing well these days. Never before has the company offered as wide a variety of automobiles to an even wider market. And yet, like its parent company Ford, the fabled marque from Coventry is not fairing well in America—every car manufacturer’s biggest market. In fact, compared to BMW, Lexus, and Mercedes-Benz, the icon is struggling to see its
cars off dealer showroom floors. All three of its competitors, by contrast, have enjoyed solid sales growth for more than a decade.
Once December gives way to January, Jaguar will have managed to sell just over 40,000 vehicles in the U.S. this year. That estimate represents more than a 10% decline from 2004 sales figures. By comparison, in the more exclusive 1980s, Mercedes-Benz sold roughly 60,000 automobiles per annum, just 25% of current figures.
What could account for this drop in sales? Optimists and Jaguar fans alike (of which I include myself) can point to the outgoing XK8 and XKR convertibles and coupés as “lame duck” models that after a solid run are no longer enticing to buyers, since their replacements are slow, but sure, to come in 2006.
However, this claim may be too optimistic. The compact, sporty, and moderately priced (“moderate” for the Jaguar market mind you) X Type was supposed be a launch pad into BMW 3-Series-like sales figures. The demand, however, was never as strong. The X Types themselves turned out to be not so moderately priced; with the adoption of options like GPS navigation sending a modestly equipped model into the $40,000+ range. Couple this with the fact that one could purchase a year old mid pack and more luxurious S-Type for the same amount of money, and the X Type’s support base is lessened even further.
After observing the situation for the past several years, the following is what I could garner as the principle causes for the company’s current gremlins.
1) Body Sharing. Most car buyers are disquieted with the notion that a high priced Jaguar shares the same platform and many components with a European model Ford. This is true of both the X and S Type sedans. Plus, the new XK model looks like a cheaper and clumsier looking version of the sexy new Aston Martin Vantage.
2) Poor Residuals. As aforementioned, there is little incentive to purchase a less expensive entry-level Jag (like the X Type), when two years depreciation can nock up to 30% off the value of a pricier cat like the S-Type or XJ sedan. Unless one needs all wheel drive, there is no incentive. Why Jaguars still have poor residual value is beyond me. J.D. Power & Associates has consistently rated recent Jaguars more reliable than models from BMW and Mercedes-Benz.
3) Cost Cutting. Pull the door handle of a new aluminum bodied Vanden Plas (known as the Daimler in traditional Europe) and the heavy, secure feeling that was present in the last Vanden Plas is gone in the name of weight reduction. Everything about the new flagship XJ line feels like plastic. The Connolly hides of previous generations: richly aromatic and glorious to behold, are gone in favor of what feels like Infiniti grade leather (cheap looking and quick to wear). Even the burled picnic tables behind the front seats are plastic. Who is Jaguar (and Ford) kidding with these slights at $70,000? Jaguar cannot be turned profitable by compromising the marque’s standards of quality.
While Jaguar may be happily over those dark days in the 1980s, the company
must recalibrate itself into a forward moving company that does not seek profitability through cost reduction plans. Such moves only lead to stagnation, which is what Jaguar suffered through two decades ago. The new XK that is due to reach these shores soon should provide fresh new momentum for the marque, if it proves to be an abled performer and of quality construction. The restored, but fragile, automotive legacy of Sir William Lyons depends on this very feat, as does the future profitability of Jaguar.
cars off dealer showroom floors. All three of its competitors, by contrast, have enjoyed solid sales growth for more than a decade.Once December gives way to January, Jaguar will have managed to sell just over 40,000 vehicles in the U.S. this year. That estimate represents more than a 10% decline from 2004 sales figures. By comparison, in the more exclusive 1980s, Mercedes-Benz sold roughly 60,000 automobiles per annum, just 25% of current figures.
What could account for this drop in sales? Optimists and Jaguar fans alike (of which I include myself) can point to the outgoing XK8 and XKR convertibles and coupés as “lame duck” models that after a solid run are no longer enticing to buyers, since their replacements are slow, but sure, to come in 2006.
However, this claim may be too optimistic. The compact, sporty, and moderately priced (“moderate” for the Jaguar market mind you) X Type was supposed be a launch pad into BMW 3-Series-like sales figures. The demand, however, was never as strong. The X Types themselves turned out to be not so moderately priced; with the adoption of options like GPS navigation sending a modestly equipped model into the $40,000+ range. Couple this with the fact that one could purchase a year old mid pack and more luxurious S-Type for the same amount of money, and the X Type’s support base is lessened even further.
After observing the situation for the past several years, the following is what I could garner as the principle causes for the company’s current gremlins.
1) Body Sharing. Most car buyers are disquieted with the notion that a high priced Jaguar shares the same platform and many components with a European model Ford. This is true of both the X and S Type sedans. Plus, the new XK model looks like a cheaper and clumsier looking version of the sexy new Aston Martin Vantage.
2) Poor Residuals. As aforementioned, there is little incentive to purchase a less expensive entry-level Jag (like the X Type), when two years depreciation can nock up to 30% off the value of a pricier cat like the S-Type or XJ sedan. Unless one needs all wheel drive, there is no incentive. Why Jaguars still have poor residual value is beyond me. J.D. Power & Associates has consistently rated recent Jaguars more reliable than models from BMW and Mercedes-Benz.
3) Cost Cutting. Pull the door handle of a new aluminum bodied Vanden Plas (known as the Daimler in traditional Europe) and the heavy, secure feeling that was present in the last Vanden Plas is gone in the name of weight reduction. Everything about the new flagship XJ line feels like plastic. The Connolly hides of previous generations: richly aromatic and glorious to behold, are gone in favor of what feels like Infiniti grade leather (cheap looking and quick to wear). Even the burled picnic tables behind the front seats are plastic. Who is Jaguar (and Ford) kidding with these slights at $70,000? Jaguar cannot be turned profitable by compromising the marque’s standards of quality.
While Jaguar may be happily over those dark days in the 1980s, the company
must recalibrate itself into a forward moving company that does not seek profitability through cost reduction plans. Such moves only lead to stagnation, which is what Jaguar suffered through two decades ago. The new XK that is due to reach these shores soon should provide fresh new momentum for the marque, if it proves to be an abled performer and of quality construction. The restored, but fragile, automotive legacy of Sir William Lyons depends on this very feat, as does the future profitability of Jaguar.
No comments:
Post a Comment