Tricky times for Jaguar
They're going through some tough times at Jaguar right now.
Ford COO Nick Scheele has admitted that Jaguar is heading
for a $500 million loss this year and several factors seem
to be responsible. One of the most unsettling for Jaguar
executives must be the fact that the X-type is severely
undershooting volume targets and has required aggressive
incentives to achieve sales to the leasing sector in the
US. European sales of the baby Jaguar are also a lot lower
than expected (and clearly the lack of a diesel engine is
But what about the great Jaguar brand-stretch exercise and
the new breed of younger Jaguar customer attracted to the
smaller and more affordable X-type? Indeed, the question
could be asked, how far should Jaguar go in moving
From what I am hearing, new younger customers are not
exactly overrunning Jaguar dealers. Rather, the X-type
customers are drawn from the same demographic/income
bracket pool as the traditional Jaguar customer. That
shouldn't be too surprising and isn't altogether a bad
thing (though it is better to be selling them the bigger
models of course); Jaguar still has a rarefied image and
that brand image is something to be handled with respect -
like the Jaguar driver himself.
Oh yes, the Jaguar driver. It's a definite big-car
statement: bold, British and very proud of it. Solid. Not
to be messed with. Traditionally, 'Jaguar driver' is rich
enough not to worry about the reliability hassles and
sizeable repair bills that go with the territory. In my
view he's (a Jag is definitely a man's car) a company
director, smokes fat cigars and wears pinstriped suits.
'Jaguar driver' probably belongs to a gentlemen's club
in London, regularly takes lunch with his stockbroker and
has a place in the country where he enjoys the occasional
run with a (fox) hunt. You get the picture - an old-style
gent. That's a bit exaggerated, but it is probably not a
million miles away from the popular idea - in Britain at
least - of the quintessential Jaguar saloon car driver.
And the thrusting young executive? He'll not want to be
labelled an old fart and will prefer to take the BMW every
time. But the successful guy in his late thirties or
forties? Perhaps he doesn't mind basking in the reflective
glow of the Jaguar brand values and could be more amenable
to a baby Jaguar. But it must be a less serious statement
than that associated with the XJ-sized flagship. Serious,
but not too serious - 'funky but neat' and it is most
definitely not a 3 Series. But Jaguar must be careful. BMW
can cover all the bases from 3 Series and up, but Jaguar's
brand can't easily stretch that far in my opinion.
So, Jaguar's executives shouldn't get too wound up over
lower than target sales of the X-type in my view. It could
actually be a blessing in disguise. The volume ramp-up
looked pretty sharp and it would perhaps be better to grow
sales more naturally, making sure that the car is reaching
the right customers and that the brand image is being
maintained. But that's not an easy balancing act and I'm
assuming there is some room for manoeuvre on the financial
side. That half billion deficit won't be helping matters.
Pressures for even more economies at Jaguar and deeper
integration with Land Rover could build over the next year.
Tricky times for Jaguar.