Jaguar seeks better hunting grounds

Some car companies are thriving, some are struggling. Jaguar, of late, has struggled.

For a company which has been on life support more than once through its 85-year existence, Jaguar will not give in.

It is hanging on grimly amid on-again, off-again suggestions its parent company, Ford, like it did earlier this year with Aston Martin, wants to sell.

As a brand it still has an enormous amount of cache.

Through all the turmoil Jaguar has been a survivor.

There is no question many mistakes were made, none more obvious than its failure to depart from retro styling and its indecision over future product.

Many suggest it should have by now cashed in on the SUV phenomenon. It can leverage much engineering and purchasing might from its gifted offroad stablemate Land Rover. There still is a chance Jaguar, in the long term, will bite the bullet and emerge with a quality SUV.

Jaguar also seriously considered coming out with a budget roadster to fight with Mazda's evergreen MX-5 but the F-Type concept was still-born when it appeared about seven years ago.

Even so the F-Type and the similar XK180 concept showcased the gorgeous design skills still prevalent among Jaguar's team.

In the short-term Jaguar will replace its retro S-Type saloon with the XF, which has clear contemporary and future design elements, bringing it into line with its luxury rivals.

The XF, which will be shown in production-ready form at the Frankfurt Motor Show in September and released in Australia later next year, uses interior cues similar to the brilliant XK coupe and convertible.

It will be on a longer wheelbase and have wider front and rear tracks so it will be roomier inside.

Jaguar may have slipped up in bringing out the budget $50,000-plus X-Type small sedan to try to muscle in on BMW 3-series territory.

It didn't spark the sales volume — although it has improved — that it pinned so many hopes on and in some respects the car which was built off Ford's Mondeo platform didn't do the leaper badge's image many favours.

In Australia, Jaguar has mirrored the rough ride it has experienced internationally with sales coughing and spluttering along.

In 2006 Jaguar sold 1011 vehicles in Australia with the X-Type accounting for 676 compared with 975 (630 X-Types) the previous year.

Business at Jaguar has been marking time for the past few years but in year-to-date figures the company is falling behind last year's mark of 367 to the tune of 35 cars.

But funnily enough, volume is not the ultimate figure for Jaguar Australia general manager Dorian Lapthorne who says the company wants to model itself on Porsche.

That is a big tick for Porsche's business operations which have won universal praise for being the only automotive company in the world that increased profit every year from 1995-2005.

“Around the world Porsche has the highest profitability per unit of any manufacturer,” Lapthorne says.

“They look to us like a good model for success.”

Lapthorne qualifies the goal by saying Jaguar is not about to come out and corner the two-seater sports car market.

“I'm saying as a business model, as a dealer network model, as an approach to the market that's got to be something that's a way of going forward.”

Jaguar wants to shift cars but the balance sheet is reliant not so much on the number of vehicles sold but in lifting the average retail price.

“Yes, year-to-date we're a little off the pace and we're completely comfortable with that,” Lapthorne said.

“It's sometimes a difficult thing for people to understand because it says more equals more generally.

“I think we're down about 10 per cent and that's completely in line with our plans.

“In fact I think we're about five per cent ahead of our forecast.”

You might be scratching you're head thinking that being off the pace is in line with plans but the method to the madness is in a greater spend by the customer.

“It doesn't sound like a sensible thing to be doing until I tell you that our average retail price has gone from about $85,000 last year to about $100,000 this year.

“I'm not going to go into the profit behind that, obviously, but that actually tells quite a good story for ourselves and dealers in terms of profit.”

The focus for Jaguar has clearly shifted to the top end with its XK and XKR models rather than the “humble” X-Type.

The X-Type path has proved to be a dead-end in terms of Jaguar growing its business on a mainstream scale as the Germans have done.

“If you go back to 2001 when we were introducing the X-Type, we were then on what we thought was a growth path.

“We thought we were a brand that was going to replicate what BMW, Mercedes and Audi was doing and extend down from our traditional premium end of the market.

“For a number of reasons that didn't work.”

There remains a degree of exclusivity and individuality about Jaguar buyers.They don't want to be seen as people who are driving cars built for the masses.

“The Jaguar brand is very much seen as a brand for individuals,” Lapthorne said.

“And that, when we do our brand tracking and brand research, is the one characteristic Jaguar owns across all luxury car lines compared to BMW and Audi and Lexus and VW and Peugeot.

“I think that is one of the reasons which inherently prevented us from reaching the growth path we wanted.

“The X-Type, a fusion of an XJ nose and an S-Type rear, was seen to be too conservative and was dressed to appeal to the Jaguar faithful thus hosing down the chance of catching fire with the broader audience.

“It (X-Type) really hooked into those who already loved Jaguar and didn't extend outside that little footprint.”

So what does the future hold?

“As an example we like to look at Porsche which has a very focused product line-up, a very hyped dealer network and they don't sell huge amounts of cars,” Lapthorne said.

“So we look at that and think that's a pretty good model for success.

“If we got Jaguar into that sort of space — highly focused, premium, niche then I would think we've done a good job.”