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Old 10-06-2005, 07:43   #1 (permalink)
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US:Land Rover boss says diesel SUVs are unit's future

Land Rover boss says diesel SUVs are unit's future

Executive enjoys its profitable times

BY SARAH A. WEBSTER
FREE PRESS BUSINESS WRITER

Land Rover
Sales of Land Rover vehicles -- all SUV's -- have been outperforming the industry and the SUV market. Land Rover now sells 17.1% of all luxury SUVs.

2005 U.S. sales through September, Percentage change in U.S. sales through September
Land Rover 30,930, 31.9%
Luxury SUVs 170,331, 2.7%
All SUVs 2,026,746, -7.9%
Source: Autodata Corp.

With sport-utility sales in the dumps, you'd think Land Rover, the unit of Ford Motor Co. that makes only SUVs, would be getting nervous.

"When you've only got SUVs and you get some of the reactions that you do, there's obviously a concern in your mind," Matthew Taylor, the managing director of Land Rover, said during an interview Wednesday in Dearborn.

But Land Rover plans to address the changing market.

Taylor said the division is trying to bring diesel engines to the U.S. market as soon as possible in an effort to improve the fuel economy of the Land Rover lineup, and it's also thinking about offering an SUV smaller than its mid-size Freelander.

And Land Rover is far from panic.

These are good, profitable times for the brand Ford purchased five years ago for just under $3 billion from BMW AG under the leadership of former CEO Jacques Nasser. In fact, Taylor maintains that Land Rover, which doesn't publicly share its financial results, is one of the success stories in the auto industry, turning from losses to "significant profits."

U.S. sales for the brand based in the United Kingdom, with offices in Irvine, Calif., are up 31.9% this year, defying the overall SUV market, which is down 7.9% during the same period. The performance was similar on a worldwide basis during the third quarter. And sales of Land Rover vehicles are growing so fast in the United States that the U.S. might unseat the United Kingdom as the top market for the brand this year.

"I can't build enough cars," said Taylor, a 45-year-old British native whose accent and history seem to fit the brand's identity.

Born in Uruguay, the son of a British diplomat, Taylor traveled the world as a child and speaks three languages fluently. He has a degree from the London School of Economics, marketed Ford-branded vehicles in Australia and moved into his current role the day Ford purchased Land Rover in July 2000.

Taylor said Land Rover owes its current success to a tight, nearly all-new product lineup, which includes the Freelander midsize SUV and the LR3, Range Rover and Range Rover Sport. He credited Mark Fields, 44, who just assumed responsibility for Ford Motor's North American division, with being a key driver of Land Rover's turnaround. Fields most recently had been executive vice president in charge of Ford of Europe and the Premier Automotive Group, which includes Volvo, Land Rover and Jaguar.

"We've been able to show we've got products that really reflect our brand promise, and people buy into that," Taylor said. "There's something different, unique, distinctive about them. And that's something people want in today's marketplace."

That is to say Land Rovers can be taken from the opera to the Rubicon Trail and can serenely navigate most any road condition in total luxury. Only Hummer comes close to the brand image of Land Rover. But, while Hummer is a more American and macho brand, Land Rover has a global, sophisticated appeal.

The Land Rover customer leans to the wealthy and young -- forty-something -- and many owners have five vehicles in their garage, including Bentleys and the like.

These aren't the types of customers easily swayed by rising gas prices, but image seems to matter to them. So Land Rover has to think about the problems posed if SUVs fall out of fashion and driving a gas-guzzler falls out of vogue.

Taylor says Land Rover will continue to stay true to its capabilities and the features that make it special in the marketplace.

"We genuinely have vehicles that can do everything that you want them to do," Taylor said. "What we offer with the vehicles is something people genuinely want."

While Land Rover's owner, Ford Motor, is embarking on a plan to ramp up production of hybrid gasoline-electric engines, Taylor doubts that is the right fuel economy solution for the Land Rover nameplate. He acknowledged that the company is looking at it, but hybrids struggle to provide the amount of low-end torque that Land Rover buyers need and expect.

Diesel engines, Taylor said, make more sense for the Land Rover brand, and he expects them in the United States "by the end of the decade." In Europe 95% of Land Rover's sales are diesel-powered vehicles.

"High-powered diesels are something that provide great fuel economy benefits anyway but actually deliver the performance," he said. "We're doing it as quickly as we possibly can. It is something I think will work for us well in the U.S. ... I think it's the right powertrain solution for the vehicle."
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