News from the North American Auto Dealers Convention
Jaguar dealers stew as Ford PAG stumbles
But 6 good months would cut the gloom
Automotive News / February 03, 2003
In all respects, Mark Hennessy seems to have been the perfect dealer to serve as chairman of the Aston Martin Jaguar Land Rover Transition Council.
After Ford Motor Co. combined its Jaguar, Land Rover and Aston Martin brands into a single company, the Jaguar and Land Rover councils were disbanded.
Last year an interim council was formed, made up of eight to 10 dealers with a preponderance of Jaguar and Land Rover dealers, as Hennessy explains.
He says the role of the transition council has been just that - to help the company through the transition in merging the three British brands.
Hennessy of Atlanta has a wealth of experience in retailing luxury vehicles. He is dealer principal for his family's two Jaguar dealerships and three Land Rover stores, plus a Cadillac dealership. Hennessy Automobile Cos., which he co-owns with brothers Stephen and Peter, also has two Lexus dealerships and a Porsche store among its holdings.
Hennessy, like many of his peers, is a second-generation dealer. "My dad started here as the second Cadillac dealer in Atlanta in 1964," he said. "I joined him after graduating from the University of North Carolina." He officially became a dealer in 1983.
The transition council is being disbanded. Taking its place will be two separate product and marketing councils and two parts and service councils for Jaguar and for Land Rover dealers, Hennessy told Special Correspondent Karen Passino last month. Details on those councils are expected to be announced during the NADA convention.
What is the role of the Aston Martin Jaguar Land Rover Transition Council compared with that of the old Jaguar dealer council?
It was an interim council made up of eight to 10 dealers that represented the Premier Automotive Group lines, with a preponderance of Jaguar and Land Rover dealers. They were trying to help the transition in the merging of the three brands within PAG.
Is the council still together?
It is being disbanded. They will have what I think will be called Business Advisory Councils. There will be product and marketing councils and parts and service councils for both Jaguar and Land Rover. So there will be four groups.
It is my impression that those councils will report to Richard Beattie, who is executive vice president of sales and marketing, and that Mike O'Driscoll, president of Aston Martin Jaguar Land Rover North America, will have something like a president's advisory committee. I think that committee will take on more of the characteristics of the former transition committee in dealing with the intangible issues that aren't covered under the four councils.
How would you sum up the past year for Jaguar?
I think it has been kind of frustrating for Jaguar dealers and for the North American Jaguar team. For a short time, we had finally grown from a two-model franchise to a four-model franchise. And now due to the winding down of the XJ product and the aging of the XK product, we're back down to a two-model lineup, which is S-Type and X-Type.
Late in 2001 and early in 2002, we could see the real benefits of a four-model lineup. And then because of market tastes and actions beyond the factory's control, and the shifting of the convertible business to the Lexus SC 430 and the new Mercedes-Benz SL, we saw ourselves essentially go back down to a two-model lineup.
Was the U.S. economy part of the dealers' frustration?
I think, overall, not really. For the most part, for Jaguar and for ourselves, business from January to August 2002 was pretty strong and was very encouraging.
Atlanta often isn't affected by downturns, but this time it got hit. I think our business here maybe got hit a little harder than nationally.
So, for the first eight months, things were going great. Then in September, nationally, Jaguar hit kind of a lull. Business kind of came back in October, and then it slowed down in November and December.
Do you think that slowdown affected all of the luxury market?
Lexus business in a lot of markets is still extremely strong. Land Rover business actually stayed good. Not knowing Mercedes and BMW per se, I couldn't comment on them.
Product is king in the marketplace. The U.S. market, I always like to say, has ADD (Attention Deficit Disorder). You've got to have a new product to get the market's attention, and then that stays with you only about six months until it moves on to the next new product. So it's got to be a spectacular product to really have legs throughout a model cycle.
Do you think a splashy launch kind of tempers that?
Everybody, no matter what their size, can construe a launch as splashy. But because of their size, Mercedes, BMW and Lexus launches are going to be a lot splashier than Jaguar's and Land Rover's. They can afford to do things in a deeper, broader way.
How are you and other Jaguar dealers looking at 2003?
With both excitement and trepidation. The new XJ8 should be a terrific car. I'm excited about it.
And yet, having been exposed to a number of franchises over the last three to five years that have introduced new products that haven't necessarily radically moved the mark, but have been simply evolution of product style, the question comes up: Are we trying to conquest new owners, or are we trying simply to appeal to existing owners that liked the old style?
Will the new XJ8 sedan appeal to not only our existing owner base but actually conquest new owners? That's where the question comes up. But it is a spectacular car.
What are the factory people saying?
They are very bullish about it. I want to take this thing pragmatically. I'm not going to be to a naysayer.
I haven't forgotten the mediocre introduction of the 1995 LS 400. Personally, I don't think (Lexus) made a big enough change to shake the market.
Take the new BMW 7 series, for example. When current owners and prospects see one on the street, they recognize that there's a difference.
I think fashion is part of the luxury mystique. When you're spending $65,000 to $85,000 on a car, at least some part of the market likes to be noticed.
And the question is: Will this new XJ8 have that kind of allure from the street so that people will know that it is new?
When will the car go on sale?
Sometime in May. It will be introduced in Europe about March 1.
Does having an all-aluminum-bodied car concern dealers?
On the one hand, what it allows you to do performancewise is a great advantage. It's fantastic what it adds to the performance.
I don't know the pitfalls yet, not having had experience with it, when it comes to either maintenance or collision repair.
I think the jury is out as to whether this is the radical shift that needs to be made.
But I think initially, at the introduction, the idea of what it does to performance and mileage enhancement and that type of thing will help us. It's the luxury package with somewhat more of a green outlook, so to speak.
Dealers probably will have to make some kind of investment in the back shop.
I'm sure there will be some special tools, but not a whole lot.
As Audi has found with the A8, some particular processes are required in collision repair. Collision repair is where some Jaguar dealers are really going to have to make some investment to be able to work on the vehicles.
What is the hot product for Jaguar? What is the weak link?
The all-new 2002 S-Type that was introduced in the spring is a fabulous car. And it has been selling well. There were substantial changes both in the interior and in the drivetrain and suspension. The performance is fantastic.
So the S-Type has been great. But the problem is, to the untrained eye, or to that conquest customer, it's the same car that has been out there for 3½ years. If it didn't appeal to you then, it won't appeal to you now, unless we can get you into the car for a test drive.
The X-Type, I think, is a great little car. The problem we've had is positioning it in the entry-level luxury market, which is about the most competitive thing around. Infiniti has come back strong; BMW and Lexus are strong. It's a pretty tough battlefield.
What are the top three issues for Jaguar dealers in 2003?
The top issue is our competitive position in the luxury segment. As business turns down, how do we compete - based on our volume and the marketing funds that go along with volume - against Mercedes, BMW, Lexus and even Cadillac?
Building quality and parts availability is probably the second most important issue.
Another issue is that during the last 24 months, there has been a great deal of fluidity in the Aston Martin-Jaguar-Land Rover management structure. Dealers want to know: When will there be continuity and stability in the management ranks?
Are incentives a worry?
Incentives are a concern, and yet I think we have to be pragmatic. Jaguar can afford to do only what Jaguar can afford to do.
How satisfied are dealers with the Jaguar franchise?
They are not as satisfied as they were three or four years ago. The satisfaction is based on business slowing down from what it was a year ago. Let's be honest - if things were going gangbusters, I think we'd all be excited about the franchise.
I think dealers' attitudes also are affected by the perceived confusion in the formation of Aston Martin Jaguar Land Rover North America.
And then there are all the clouds surrounding Ford's financial straits.
So there is confusion and concern, I'd say. But in the same stroke, six months of great business would relieve a lot of that.
Mark Hennessy "These dealerships are in my hometown, Stacy.."
Dealer since: 1983
Dealerships: Hennessy Jaguar/Buckhead and Hennessy Jaguar/Gwinnett; Hennessy Cadillac; Hennessy Pontiac-Buick-GMC-Mazda; Land Rover Buckhead, Land Rover North Point and Land Rover Gwinnett; Lexus of Atlanta and Lexus of Gwinnett; Hennessy Honda; and Hennessy Porsche of North Atlanta - all in the greater Atlanta area
Average monthly sales: Not available
Quote: "The U.S. market * has ADD (Attention Deficit Disorder). You've got to have a new product to get the market's attention, and then that stays with you only about six months until it moves on to the next new product. So it's got to be a spectacular product to really have legs throughout a model cycle."
Top 3 issues
1. Keep Jaguar's competitive position in the luxury segment
2. Build product quality and parts availability
3. Get continuity and stability in the management ranks
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....