Fifteen Years Later - Ford Still Struggling with Jaguar

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  1. TriShield

    TriShield Super Moderator® Super Moderator

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    Lincoln Isn't the Only Ford Luxury Brand in Big Trouble

    Paralyzed by the Past: 15 years into the Ford era, Jaguar still strives to frame its future

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    Jaguar's XJ flagship has a cutting-edge platform but a built-to-price interior.

    MARK RECHTIN | Automotive News
    Posted Date: 10/18/04

    Fifteen years after buying Jaguar Cars Ltd., Ford Motor Co. is still struggling with a simple question: What is a Jaguar? Is it an innovative car rife with technology? Or a denizen of the wood-and-leather ghetto?

    Jaguar is faltering in large part because it can't resolve its identity crisis.
    Executives admit that Jaguar's storied past is hindering its efforts to discover its corporate soul.

    The situation no longer can be ignored. Jaguar has lost an estimated $1.5 billion in the past three years, and Ford is running out of patience. A team led by Mark Fields, executive vice president in charge of Ford's Premier Automotive Group, is working to solve the crisis, which exists on three fronts:

    1. The automaker is stuck between Jaguar opulence and Ford bean counting. Jaguar's XJ flagship has a cutting-edge platform but a built-to-price interior. And the X-Type is a mass-market sedan gussied up in luxury garb.

    2. Jaguar's Old World heritage, particularly its curvaceous design, still moves consumers. But Mercedes, BMW and Lexus are moving ahead with daring modern styling and cutting-edge electronics.

    3. As its prime competitors offer SUVs, Jaguar is wondering whether it should follow suit. Ford sibling Land Rover occupies that niche.

    Last month Jaguar took the first step toward resolving these issues. It shut one of its three undercapacity plants - at its storied Browns Lane headquarters in Coventry, England - and abandoned a spectacularly unsuccessful Formula One racing effort. Despite these aggressive moves, one high-ranking Ford source says, "Jaguar is still a mess."

    That's where Fields comes in. At 43, he is one of Ford's fast-rising stars, known for calm in a crisis. He turned around Ford's operations in Argentina before bringing foundering Mazda back into the black. But can a young fast-tracker turn around one of the most legendary brands in the industry?


    Fields thinks Jaguar is already on the comeback trail.

    "Jaguar has the strongest lineup it has ever had. We just need to take it to the next level," Fields says. "What I learned at Mazda is that you need to dig down to what a company does well. Don't try to invent something that you are not."

    The heritage trap

    Some Japanese luxury automakers would kill for Jaguar's storied past: the famed Le Mans and Grand Prix race wins, the burled-walnut dashes and Connolly leather seats so admired by the wealthy. Forty years ago, Jaguar was known for innovation, for racing prowess, for taking risks. Jaguar has tried to bring that spirit back with such things as the development of an aluminum unibody platform for the XJ sedan and upcoming XK coupe.

    Mike O'Driscoll, president of Aston Martin Jaguar Land Rover North America, says: "Jaguar is the most stylish car and brand. It is glamorous and exciting. It has always been distinguished by originality, sensuous style and a real performance spirit. In its halcyon days, it had a provocative defiant streak."

    Yet it seems for every bold stroke that Jaguar makes toward achieving that futuristic vision, it has slipped up in the details.
    Designers are pulled by conflicting orders to update Jaguar styling while harkening back to the epochal 1950s and '60s cars. And cost cutters have saddled it with Ford parts-bin interior fittings.

    Eric Noble, president of the Car Lab consultancy in Orange, Calif., says Jaguar "blew it" by giving "abominable" interiors to a sedan that goes for $61,495, including freight.

    "The interiors just reek of Ford,"
    Noble says. "How is that part of the Jaguar heritage? The XJ is a fantastic platform. That Ford bean counters are unwilling to spend another $250 on piece costs for the interior is a crime. They aren't willing to admit the problem, much less fix it."

    XJ sales this year will be lucky to exceed 16,000 units in the United States and western Europe, which account for the vast majority of the model's sales. Jaguar wanted 30,000 sales a year globally.

    Low-rent leapers

    Jaguar's product-image problems extend from the flagship down to its base model, analysts say.

    For Jaguar's first foray into near-luxury, it settled on borrowing the X-Type platform from the down-market Ford Mondeo.
    The auto press said it lacked the driving characteristics that people identity with Jaguar and deemed it too small and chintzy inside.

    Jaguar grievously overestimated demand for the X-Type. Jaguar thought it could sell 100,000 a year globally. It never came close. Last year, the U.S. and western European markets barely broke 50,000 total units.

    X-Type sales this year in the United States are in a tailspin. They are off 19.6 percent from the first nine months of 2003 despite make-a-deal advertising and rental fleet dumps.

    Dan Gorrell, an analyst with Strategic Vision in Vista, Calif., says: "When you see X-Type ads screaming $299 leases, true Jaguar owners say, 'Gee, my maid can buy a Jaguar!' And seeing maids driving Jaguars hurts brand imagery."

    Yet despite claims by numerous analysts that the X-Type has harmed the brand, Jaguar executives unanimously defend the vehicle, stating that 90 percent of the customers are new to Jaguar.

    But Bibiana Boerio, Jaguar Cars' new managing director brought over from Ford's financial side, added a sobering note: "We are addressing whether X-Type is a true Jaguar. I think there is a place for it, but at lower volumes."

    As for the midrange S-Type, it has not met expectations since its 1999 launch. It was stung by media criticism that it shares too many underpinnings with the Lincoln LS. The S-Type hit its 22,000-unit U.S. sales target only in 2000. It has since slipped to the 15,000-unit range. This year, sales are off nearly 20 percent through September.

    Residual weakness

    According to Automotive Lease Guide in Santa Barbara, Calif., Jaguar brand residuals after 36 months of ownership peaked in 2000 at 50 percent retained value. Those numbers have plummeted since, dragged down by the introduction of the X-Type in 2002, says Raj Sundaram, Automotive Lease Guide's president. Jaguar's 36-month residuals now hover at 44 percent, far below those of the competition.

    Joe Greenwell, CEO of Jaguar and Land Rover, puts Jaguar's focus on turning around the residual picture. "We have to establish a proper supply and demand in the U.S.," he says. "I don't want a situation where year-over-year sales are up but we have substantial losses. We have to reduce our rental fleet obligations and focus on margins."

    Jaguar also is struggling with whether to build an SUV. Mercedes, BMW and Lexus sell successful SUVs; last year in the United States the RX 330 accounted for 35.5 percent of Lexus sales. Greenwell says Jaguar designers are studying the idea of a crossover vehicle melding a low-slung sporty coupe and SUV.

    This offends purists who feel Jaguar has no business building such a vehicle. It also flies in the face of the PAG brand strategy, which has Jaguar building cars and Land Rover making SUVs. "We are looking at transitional segments," Greenwell says. "There is no harm in looking at it and testing it."

    Just around the corner

    Like most executives in a pinch, Jaguar's managers beg for patience from dealers and the press. They say the next generation of products will show a new nature for Jaguar.

    Says O'Driscoll: "We still believe there are a great number of car buyers who dream of owning a Jaguar, but they are trapped in competitive cars. We need to work on those who dream of Jaguar but hesitate and settle for a less-illustrious car. They need persuading that we are worth the investment."

    One dealer who has seen Jaguar's future lineup says the XK8 coupe replacement was "great." He raves about a prototype S-Type redesign, calling it "a Jaguar for the new era."

    Unfortunately, the new XK8 won't arrive until 2006, and the S-Type might not see American roads until 2008. More than a couple of analysts wonder whether Ford will have the patience to sit through that many more years of red ink.

    Admits Fields: "Jaguar has passion, but passion alone won't pay the bills."

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  2. 6Double5321

    6Double5321 Into the blue again, after the money's gone

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    Ford bean counters have been pissing me off since about 1990.
     
  3. ZAQ786

    ZAQ786 BMW: The reason Lexus is still 'In the pursuit of

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    the x-type got the worst crash test rating in the industry.
     
  4. slayer88

    slayer88 New Member

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    acura>jaguars
     
  5. mucky

    mucky .

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    It's sad that you can buy a Jag X-Type for just a little over a thousand more than an Accord 4cylinder w/Leather. :weak:
     
  6. ZAQ786

    ZAQ786 BMW: The reason Lexus is still 'In the pursuit of

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    :eek3: I still would not.
     
  7. mucky

    mucky .

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    It depreciated $6,000 before it's even negotiated. Who would want that? :ugh:
     
  8. ZAQ786

    ZAQ786 BMW: The reason Lexus is still 'In the pursuit of

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    Oh shap!!! i need to lease that biach! :mamoru:
     
  9. Dαzzα

    Dαzzα Guest

  10. curiousgeorgeM3

    curiousgeorgeM3 naughty little monkey

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  11. Dr. Woo

    Dr. Woo Guns don't kill people

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    The X-Type is the cheapest, poorest-built entry-level luxury car I've ever experienced. Just a gussied-up Mondeo with AWD.

    No, wait...not even gussied-up.
     
  12. DK

    DK New Member

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    thats exactly it: hardly anybody wanting to buy an entry level luxury sedan considers the s-type or x-type jags. people buy mercs, audis and bmws, maybe even passats or lexus cars.

    and quite frankly, if i were to start a family id get an a4 avant or a 3 series sedan before ever even considering a luxury mondeo.

    at the end of the day, with its current image jaguar can sell classy looking cars that stand out in the luxury sector (ie the XK or the XJ series) to people who can afford not to give a flying fuck about losing half their investment within a year, but thats it. if they want to be able to expand successfully into smaller segments theyd have to go the way merc went with the 190 "baby benz":

    build up an image of reliability, solidness and general quality and THEN build an entirely new small luxury car in order for that to profit from the larger vehicles.
    using a ford platform wont work. and neither will using the volve X 90 (or whatever its called) platform for an suv. simply putting a jag batch onto a pile of shit doesnt sell now and most likely wont for the next decades.
     
  13. Volkl

    Volkl New Member

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    Come on now, cars are like women. Those that are beautiful are high maintenance.
     
  14. Dr. Woo

    Dr. Woo Guns don't kill people

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    Not all beautiful cars are high maintenance. Look at Porsche (save the Cayenne).
     
  15. Volkl

    Volkl New Member

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    I love Porsches, but not for their looks. They don't have the same passion of an Aston Martin or Ferarri. Those cars are art, while a Porsche is simply brilliant engineering...
     
  16. VD

    VD Active Member

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    o ya well my saturn is a peice of shit
     
  17. Pussysmith

    Pussysmith Banned

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    The X-Type is not a bad vehicle. The AWD makes it a great car for older females who do not need a sportier A4 or 3 series and live in colder climates. And it still has the nice Jaguar leather and wood all over the interior along with the ability to bog through mud. I would say that a turbo kit would be a good idea for them, or better yet a factory option for a turbo.
     

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