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Old 03-30-2005, 11:58   #1 (permalink)
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US:Cheapest Jags get kicked to the curb

Cheapest Jags get kicked to the curb

By James R. Healey, USA TODAY


The X-Type 2.5 will be gone soon.

NEW YORK — Money-losing Jaguar is killing the cheapest versions of its entry-level X-Type sedan and adding more-expensive X-Types and a $115,000, high-power XJ sedan to regain an image of exclusivity and the profit it hopes that brings.

Jag's move shows that European luxury brands can go too far downscale, or use the wrong products when they do.

BMW moved down-market in the 1990s, but by 1999 had dumped the very cheapest, four-cylinder versions of its 3 Series entry cars because they conflicted with the brand's high-performance image.

Mercedes-Benz sells a relatively low-price, lower-power C-Class lineup, starting with the $27,000, four-cylinder C230. C-Class is Mercedes-Benz's biggest seller in the USA, but C-Class sales are down 29% the first two months this year, according to Autodata.

Jaguar has not only killed the $31,000 2.5 X-Types, but is reducing incentives on 3.0 X-Types. That leaves more money to promote higher-price cars, but it has also helped cut X-Type sales, down 20% this year.

"We're quite deliberately spending far less on incentive marketing for the X-Type than we have been spending, and far less than the competition," says Mike O'Driscoll, head of Jaguar's U.S. operations.

O'Driscoll won't call the moves a phaseout of the X, but says that Jaguar is "looking at our options."

The $46,000 S-Type, next up the ladder from the X-type, seems vulnerable, too. Sales are off more than 20% in a new-vehicle market up 1%, Autodata says. "XK and XJ are the models you think of when you think of Jaguar," O'Driscoll notes. Those are $62,000 and up.

The shift back upscale calls into question Jaguar's 6-year-old strategy of offering cheaper, smaller cars to quadruple worldwide sales to 200,000 a year.

Jag lost roughly $700 million last year as a sales slump meant too little money to pay the overhead on capacity to build so many cars. Jaguar is expected to report a loss this year, says owner Ford Motor. It will shut a U.K. factory in June and lay off 1,150 workers.

Ford CEO Bill Ford has called Jag "a financial dog." He says the expansion plan, begun before he became CEO in 2001, was wrong: "I think that brand is an exclusive brand that doesn't lend itself to big volumes."

Some analysts say that Jag chose the wrong car. Purists consider the X-Type a disguised Ford Mondeo. "It looks like a Ford. It feels like a Ford. Why did they do that?" says auto con******t Michael Maziasz at Michigan-based Maziasz Consulting Services.

"The X-Type wasn't a bad idea; it was bad execution," says Eric Noble, president of California-based con******ts CarLab. He thinks Jag needs an entry model, "but they need to do it right."

Contributing: Sharon Silke Carty
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Old 04-22-2005, 06:29   #2 (permalink)
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Re: US:Cheapest Jags get kicked to the curb

Jaguar cuts 'Baby Jag' production

BBC
UK Edition


Jaguar says it does not want to flood the market with its cars

Jaguar is to cut production of its X-type 'Baby Jag' model, the luxury carmaker has announced.

The Ford-owned company's 3,000-strong workforce will produce cars for just three days next week at its Halewood plant in Merseyside.

Jaguar has already dropped plans to make 200,000 cars a year, and is ending production at its Browns Lane plant in Coventry later this year.

On Wednesday, Ford reported a drop in first-quarter profit to $1.2bn (£630m).

'Clear strategy'

The X-type, dubbed the Baby Jag by critics, was launched in 2001, and about 66,000 were sold last year.

However, Jaguar said no cars were made at Halewood last week, as part of its drive to scale back production.

"We do not want to flood the marketplace with cars, this is a very clear strategy," a spokesman for the company said.

"We want a lower volume, higher revenue business and to concentrate on the higher series cars - the more profitable vehicle lines."

Jaguar's sales fell 21% in the first three months of 2005, as a result of refocusing its car range in the US towards top-of-the-range models, the company said.

Production line staff at Halewood will work on Tuesday, Wednesday and Thursday next week, Jaguar said.

The end of car production in Coventry will result in 1,150 job losses, although the Browns Lane site will remain Jaguar's headquarters.
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