Ford not about to get rid of Jaguar

[SobeSVT]

Ford not about to get rid of Jaguar
Aug 10 2006

By John Cranage, Automotive Correspondent


One of Ford's most senior executives has poured cold water on speculation that the company is planning to abandon Jaguar.

A sale of the loss-making West Midlands-based luxury brand has been touted by commentators since Ford announced last week that it had recruited former Goldman Sachs and Bank of America mergers and acquisitions specialist Kenneth Leet as adviser to group chairman and chief executive Bill Ford.

But comments by Mark Fields, Ford's president of the Americas and a former head of Ford of Europe, in the US yesterday suggested it would keep Jaguar, which sits alongside Land Rover, Aston Martin and Volvo in the group's Premier Automotive Group of luxury European brands.

Mr Fields, who is spear-heading Ford's North American restructuring plans which involve shutting 14 plants and cutting 30,000 manufacturing jobs, was asked about Jaguar's future after speaking at a seminar at the Centre for Automotive Research in Michigan.

He said Ford would position Jaguar as a "niche brand" after abandoning hopes a big growth in volumes driven by the X-Type "Baby Jag" which has been built at Halewood on Merseyside since 2001.

Jaguar is in a "rebuilding phase and we are recalibrating from our very high expectations of the late 1990s", Mr Fields added.

Although he stopped short of ruling out a sale, his comments were interpreted as meaning Ford is keeping faith with the iconic British carmaker which it bought for £1.6 billion in 1989.

Mr Fields' remarks were, in fact, a reiteration of the recovery programme that Jaguar began in 2004 amid continuing multi-million pound losses and falling sales.

Instead of chasing volume - previous bosses, including the former BMW executive Wolf-gang Reitzle thought X-Type would take annual sales to 200,000 against the 90,000 actually sold last year - it is now pursuing a business plan centred on selling fewer but more profitable higher margin vehicles.

The strategy is based on the fact that most Jaguar buyers love the cars so much they are willing to spend thousands of pounds more on specification list extras - £6,000 on average in the case of the new XK sports car - much of which is pure profit.

And it seems to be yielding results.

UK managing director Geoff Cousins said at the British International Motor Show last month that Jaguar's revenues and profits were improving.

A question mark hangs over a replacement for the X-Type, which ironically is beginning to sell in meaningful numbers in emerging markets such as Russia.

But Jaguar insiders say the product-led recovery will continue with the new S-Type due in 2008 which is expected to be radically different in design to the current unexciting-looking version.

For more click here.

[mgescuro]

Instead of chasing volume - previous bosses, including the former BMW executive Wolf-gang Reitzle thought X-Type would take annual sales to 200,000 against the 90,000 actually sold last year - it is now pursuing a business plan centred on selling fewer but more profitable higher margin vehicles.

WHich is exactly what they should ahve done in the first place.
THe S-Type should be volume... well as much volume as you can get from a car with a base of $46,000.

[Kheiron]

Originally Posted by mgescuro

WHich is exactly what they should ahve done in the first place.
THe S-Type should be volume... well as much volume as you can get from a car with a base of $46,000.

The X-type can be volume oriented also, but not more than 50k a year or so. If they would have benchmarked the 3series/IS/A4 and brought worthy powertrains/chassis/exterior styling, it could work.

New design language exterior styling wise is required if they are to attract a larger audience.

[genjy]

Is the new S-Type going to be based on the Five-Hundred's platform? The Lincoln LS and the T-Bird are gone, so the S-Type is the only car sitting on the DEW-Lite platform right now. The only modern platform Ford has of comparable size to the DEW-Lite is Five-Hundred's (FWD/AWD) and the Mustang's (RWD)...

[FoMoCo Fan]

Originally Posted by Kheiron

The X-type can be volume oriented also, but not more than 50k a year or so. If they would have benchmarked the 3series/IS/A4 and brought worthy powertrains/chassis/exterior styling, it could work.

New design language exterior styling wise is required if they are to attract a larger audience.

The point is NOT to attract a larger audience. The point is to sell fewer units at higher prices and much higher profits, a la Porsche, Bentley. Jaguars need to be sexy and exclusive, yet still attainable (in a way that a Bentley is not for most people).

Originally Posted by genjy

Is the new S-Type going to be based on the Five-Hundred's platform? The Lincoln LS and the T-Bird are gone, so the S-Type is the only car sitting on the DEW-Lite platform right now. The only modern platform Ford has of comparable size is Five-Hundred's (FWD/AWD) and the Mustang's (RWD)...

No. It's going to ride on a steel platform based on the XJ's aluminum platform.

[Greg Burr]

Originally Posted by mgescuro

WHich is exactly what they should ahve done in the first place.
THe S-Type should be volume... well as much volume as you can get from a car with a base of $46,000.

AMEN, BROTHER!

I wouldn't worry about the loss of customers from killing an entry level (wannabe) model (that dilutes the prestige and mystique of the brand): it's not as if a Jag dealer won't have enough cars to sell. In SoCal I see Jags sold LR's alongside each other. There's a complete product line.

Kinda like the Ford version of the PBGMC dealership approach.

[mgescuro]

Originally Posted by FoMoCo Fan

The point is NOT to attract a larger audience. The point is to sell fewer units at higher prices and much higher profits, a la Porsche, Bentley. Jaguars need to be sexy and exclusive, yet still attainable (in a way that a Bentley is not for most people).

I think Jaguar would do well with its core 3 cars -- S-TYpe, XJ, and XK. THough, I think they could add one more car line -- a 2+2 hartop convertible based on S-Type maybe with a base at $60K or so.

Aston can be the sexy, exclusive and UN-attainable brand

[mikesright]

Agreed with FoMoCo Fan, Jaguar needs to be in a higher class. There's no way it should compete with BMW and Mercedes, it needs to be higher, in a different class entirely. When they were trying to make it a volume brand, they were trying to make it something it shouldn't have been.

Better decision-making on the part of Ford here.

[paul3230]

yeah right! They say this now and the end of the year it's in the hands of some random Chinese auto company

[CACressida]

Jags have evolved into some ugly machines. Nobody even brags about driving a Jaguar anymore. On the otherhand, the LandRover/RR has alot of potential.

[Kheiron]

It would be interesting to see a jaguar crossover vehicle (think ford freestyle/ GMC acadia -esque)

If Ford can make it profitable keep it then. If not, cut your losses and sell it to VW or someone who has the resources to turn around the brand.

[SobeSVT]

How funny how a pure speculative conclusion out of the hiring of Kennneth Leet turned into a media frenzy and the total assurance that Ford was pretty much scratching off Jaguar like a bad rash. And now that there is a denial from Ford we have to dig all the way to Birmingham, UK.

I am not only pleased with the news but also with what Mark Fields said about the future direction of Jaguar.

Originally Posted by mgescuro

Aston can be the sexy, exclusive and UN-attainable brand

It is my friend, it is.

Originally Posted by paul3230

yeah right! They say this now and the end of the year it's in the hands of some random Chinese auto company

You wish!

All this mess is the handywork of Wolfgang Reitzel and Jacques Nasser. They ploted to kill Lincoln and make Jaguar into a BMW competitor which Reitzel saw as a way to restore his hurted pride after failing to obtain the top position at BMW. The only reason that Lincoln survived this plot was the oposition of the Ford family in cancelling such historic brand. Both brands came out badly hurted out of this mess.

[FoMoCo Fan]

Originally Posted by SobeSVT

How funny how a pure speculative conclusion out of the hiring of Kennneth Leet turned into a media frenzy and the total assurance that Ford was pretty much scratching off Jaguar like a bad rash. And now that there is a denial from Ford we have to dig all the way to Birmingham, UK.

I am not only pleased with the news but also with what Mark Fields said about the future direction of Jaguar.

It is my friend, it is.

You wish!

All this mess is the handywork of Wolfgang Reitzel and Jacques Nasser. They ploted to kill Lincoln and make Jaguar into a BMW competitor which Reitzel saw as a way to restore his hurted pride after failing to obtain the top position at BMW. The only reason that Lincoln survived this plot was the oposition of the Ford family in cancelling such historic brand. Both brands came out badly hurted out of this mess.

?hurted?

[megeebee]

Originally Posted by SobeSVT

All this mess is the handywork of Wolfgang Reitzel and Jacques Nasser. They ploted to kill Lincoln and make Jaguar into a BMW competitor which Reitzel saw as a way to restore his hurted pride after failing to obtain the top position at BMW. The only reason that Lincoln survived this plot was the oposition of the Ford family in cancelling such historic brand. Both brands came out badly hurted out of this mess.

I believe you are absolutely right. I think these two intended Jaguar to be Fords competition for Cadillac, since Lincoln was even then on the down slope. And GM had shown the Evoq and announced the revitalization investment. And, at the time, it must have seemed like a good idea. Jaguar had a better name "cachet" than Cadillac. Still does. But time had other plans.

Anyway, it seems that Ford has a good plan. Fewer, more profitable cars. Excellent. This is exactly what Jaguar always was and what the public expects of it. I say hooray. They will most likely sell Halewood, or revamp it for another PAG brand.

EDIT: Oh, and redesign the ones that are left so that someone will buy them.

[kenman923]

They will have to make Jaguar its own unique brand, not a glorified Ford.