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JLR positive about future sales recovery

Come on, Evoque: The Range Rover Evoque mid-size SUV is one of JLR’s best-selling models in Australia, with the second-generation model recently entering showrooms.

Supply, job cuts bring efficiencies, new models offer hope but hurdles remain for JLR

20 Aug 2019

JAGUAR Land Rover (JLR) is optimistic about its prospects in Australia leading into the next decade despite declining sales here and heavy losses overseas, with more appropriate supply to meet real-world demand in a slowing market as well as promising new models in the pipeline expected to lure more buyers into the fold.


While Jaguar’s volume in Australia is up slightly this year (1.1%, to 1440 units), the British prestige brand is still coming from a low base compared to key rivals like Mercedes-Benz Cars – at 18,582 sales so far this year – while Land Rover has slipped 14.1 per cent over the same period, to 5690 new registrations.


Speaking to GoAuto at this month’s launch of the Jaguar XE facelift and F-Pace SVR in northern New South Wales, JLR Australia managing director Mark Cameron revealed that the Australian subsidiary has already taken the crucial actions required to adjust to the sales downturn – including reducing staff numbers – in order to prioritise profitability and long-term sustainability.


“In Australia, you have to look at how the market has decelerated over the last 18 months,” he said.


“We, as other manufacturers, found ourselves with stock, and you have to clearly sell that stock. And the rate of which the industry adapts to what the true level of demand is can take some time.


“So, you are comparing the year-on-year figures and saying what is the true customer demand rather than vehicles that manufacturers had in stock and had to just push through and find homes for.


“We’re in the business now of selling true volume. We have got our supply/demand balance absolutely intact. We always, as everybody else does, strive to have one less car than there is a customer. Our dealers make better margins that way. We don’t have to go into more distress marketing activities.


“Right now, in Australia, we are really well set with good supply, young supply, not overstocked, to meet the natural demand that’s there.


“I’m not chasing sales numbers. If that means we’re a few percentage points down on what we actually registered last year, so be it. It’s good business rather than volume. And that’s really important.


“I know still, in Australia, some brands are overstocked, they are pushing volume out, they are asking their dealers to register cars, but we’re just not going to do that.


“We had to make some changes in our office as well. We’ve grown very quickly as a company and as a brand. Sometimes when you have to manage the pressures of the business and finances, you have to take some countermeasures to manage your costs. It’s always not nice to have to take some jobs out.


“Actually, the number of people affected was relatively small, and we’ve worked hard to help them find alternatives, but we’ve had to make some cuts. I joined here in September and then having to do that in January this year isn’t what I had hoped to do, but businesses go through these cycles and I’m hoping we can grow again.”


With the volume-selling Evoque having just been relaunched as an all-new model, the popular Discovery Sport soon to be facelifted and the hugely anticipated reborn Defender arriving next April as JLR’s first real tilt at the big-selling Toyota Prado range in many years,


Mr Cameron is confident Land Rover sales will recover with model activity including the recent launch of the new-generation volume-selling Evoque, a forthcoming facelift of the Discovery Sport and the hugely anticipated reborn Defender arriving next April as JLR’s first real tilt at the big-selling Toyota Prado range in many years.


However, Mr Cameron warned that roadblocks remain ahead in Australia.


“Crucially for JLR, we are bringing cars to market that are distinctive, that aren’t me-too products, that find their own space,” he said.


“You would have seen the announcement following the I-Pace launch that the next XJ is going to be an all-electric one, and we’re going to build that in the UK, and there’s more to come which I cannot talk about right now.


“We’re really focusing on how Jaguar in particular can be distinctively different from its competitors and have an offering at a volume that makes money for us.


“(But) we don’t have a crystal ball on how the industry in Australia is going to develop. We’ve seen a tough 12 to 18 months. Luxury segments have been particularly under pressure. We’ve seen increasing taxation in states like Victoria which doesn’t help. It’s tough times in Australia right now in terms of the economy.


“What’s the next six to 12 months going to look like? We all hoped post-election and post-economic stimulus with rate cuts that we could see a bit more vibrancy in the industry.


“We saw the July figures still being down on last July, and last July was when we first really started sliding on the previous years … at least a double-digit percentage decrease on 2017… so we’re watching carefully, and hoping government stimulus spending, money in peoples’ pockets from tax returns etc will start bringing some confidence back.”


While JLR sales are falling internationally, Mr Cameron pointed to regional-specific issues rather than a larger global trend.


“If you take the China reductions out of our global sales, actually in almost all other regions, we’re up,” he said.


“In the UK, we’re up (by nearly three per cent year-on-year). The US, we’re up. In Europe, we’re broadly flat. Overseas markets are very volatile anyway and very subject to (situations such as) Russia going soft and issues in the Middle East right now.”


As GoAuto has reported, the April-to-June quarter saw JLR post a £395 million ($A700m) pre-tax loss, which was nearly 50 per cent worse than the corresponding quarter last year; revenues fell 2.8 per cent year-on-year to $A8.98b and there was an 11.6 per cent decline in global retail sales volume, to 128,615 units.

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