Make / Model Search

News - Land Rover

Evoque leads five-year Jaguar Land Rover product blitz

Beginning of the future: The Range Rover Evoque heralds the start of Jaguar Land Rover’s five-year product-led renaissance that it expects will almost double sales by 2016.

Defender reborn in Jaguar Land Rover’s volume-doubling product plan under Tata

30 Jun 2011

JAGUAR Land Rover (JLR) is working to an ambitious five-year business plan that includes a complete model refresh for Land Rover, a small sportscar plus either a rear-drive sub-XF sedan or compact luxury SUV for Jaguar.

And despite the utilitarian and iconic Defender accounting for little more than 20,000 annual sales in JLR’s 174 global markets, the Tata Motors-owned company’s group sales operations director Phil Popham is pressing ahead with an all-new replacement.

Speaking at a pre-motor show media event in Melbourne this morning, Mr Popham said a side-effect of the “very, very aggressive” business plan – which includes the development of a globalisation strategy to protect the company from international instability – was an expected doubling of sales volume by 2016.

“Doubling sales wasn’t the starting point that just happens to be the outcome,” he said.

JLR is also thinking seriously about overseas production. Land Rover recently began producing the Freelander in Pune, India, and a Chinese plant is also under consideration.

Mr Popham said the company was talking with potential partners in China, adding that as JLR expands into developing markets it would have to look at growing its production capacity overseas – avoiding punitive import duties in some markets and benefiting from free trade agreements in others.

He said overseas facilities would be used satisfy local or regional demand and did not envisage vehicles built at those plants being exported back to Europe.

The Tata-backed £1.5 billion product development blitz, starting with the all-new Evoque crossover that will be launched in Australia in October, will renew the entire Land Rover line-up – including the iconic Defender – by 2016.

Mr Popham said Jaguar would build a sub-XF contender but that it was not yet decided if this would take the shape of a rear-wheel drive BMW 3 Series competitor or compact luxury SUV.

 center imageFrom top: Jaguar Land Rover group sales operations director Phil Popham, Range Rover Vogue, Land Rover Defender, Land Rover Freelander.

Either way, he said the model was unlikely to see the light of day before the middle of this decade, adding that although these models would compete in a volume-selling sector, JLR’s desire was to remain a “premium niche manufacturer”.

The small Jaguar sportscar – positioned below the XK to compete with the likes of BMW’s Z4, Mercedes SLK and Porsche Boxster/Cayman – is due to arrive sooner, Mr Popham said. Early test mules have already been spotted in Europe.

Mr Popham said it took five years for his promise of a new Defender to get into the Land Rover product cycle plan.

“Part of the reason it has taken so long for us to decide how we are going to approach this is, how do you replace an icon … that sells in many segments but in small numbers,” he said.

Although work to define the new Defender’s role in various markets is ongoing, Mr Popham said the company had “come to the conclusion that we can make money” out of a Defender replacement.

Although Mr Popham was unable to provide details of what the new Defender might look like, he said Land Rover design director Gerry McGovern regarded the project as the “most exciting thing, even beyond the Evoque”.

After more than 60 years of production with only incremental changes, the Defender is no longer legal in some countries on emissions and safety grounds, leading to a forced withdrawal.

The venerable Defender was ousted long ago from Australia and Africa by the Toyota LandCruiser as favourite vehicle with which to go bush. The machine was dealt a further blow when the Australian Defence Force signed a contract with Mercedes-Benz in 2008 heralding the switch from Defenders to the G-Wagen.

To fuel the new model development and subsequent volume increase, a recruitment drive in the UK is adding 1500 production staff and 1000 engineers.

Mr Popham said that around the world, experienced workers from the likes of Porsche, Lexus and Volkswagen are being employed by JLR to help realise its ambitious plans.

“For me that is a real barometer of the strength of our business, the strength of our brands, that people who have got a positive future in our premium competitors are choosing to jump ship to us,” he said. “That is testament to general belief in our future.” The company’s globalisation strategy aims to limit its exposure to each of its five regions – of which its UK home market is considered a region in its own right – to a maximum of 20 per cent over the next five years, as a hedge against the risk of sudden regional decline.

JLR had considered closing one of its three UK factories but decided against the idea once it became clear that its business plan would require an increase in production volume, most efficiently met by having three domestic facilities.

JLR has gone from a “survival” strategy in the months immediately after Tata’s 2009 acquisition of the British company from Ford – when the UK and world economy went into deep recession – to a £1.1 billion ($A1.64 billion) profit for the financial year 2010-2011.

Mr Popham said that during the survival phase the company took as many costs out of the business as possible to protect new product investment so it was able to hit the market with “the right products at the right time” when the world began to emerge from the global financial crisis.

Describing Tata Group president Ratan Tata as “a bit of a petrolhead”, Mr Popham said Tata Motors – for which JLR revenue accounts for more than 50 per cent – was more of a “nurturing parent” than a controlling one.

He added that the company, treated as a separate entity within the vast global Tata conglomerate, was enjoying greater freedom and the ability to make quicker decisions than under Ford ownership, when every product approval “involved a trip to Dearborn” – a sentiment shared by several JLR executives at this morning’s event.

Mr Popham said Tata had not been taking a dividend or capital from JLR, allowing it to re-invest profits and repay some of the loans used to finance the company during the turbulent post-acquisition period when it famously asked the British government to underwrite funding from the European Investment Bank.

He also said that JLR benefits from access to the Tata empire’s steel and IT infrastructure businesses and was looking into the joint development of engines.

Recognising that JLR would “never be a BMW, he said: “We’re still small and niche in automotive terms, so every pound we spend has got to be an efficient spend.” Closer to home, Land Rover sales are up 20.7 to the end of May to 2367 units. With 212 sales the Discovery was Australia’s third best-selling luxury SUV in May, after the Audi Q5 (313) and Mercedes-Benz M-class (241), taking an 8.8 per cent segment share.

JLR Asia Pacific managing director David Blackhall said Land Rover “will more than deliver” its sales targets for the first half of the year.

“It’s been a very strong 12 months for us both globally and locally,” said. “The segments we play in are growing strongly for us in the Australian market and we are growing more strongly than the segment.

“I think testimony to the strength of the product and it has been a continuous upbeat curve in terms of sales for us in the last 12-18 months.

“With products that we know we’ve got coming including the Evoque, we can deliver a couple of targets we have long had our minds on and really close the gap in the luxury SUV market. I think it is going to be a very interesting ride through the next 12 months for us.” Jaguar on the other hand is not doing so well, 37.9 per cent down with just 280 sales to the end of May but with the updated XF sedan – featuring a frugal, entry-level 2.2-litre four-cylinder diesel variant – and lower-priced, facelifted XK sportscar arriving in October, the brand should see a turnaround next year.

The Road to Recovery podcast series

Read more

1st of January 1970

Click to share

Click below to follow us on
Facebook  Twitter  Instagram

Land Rover articles

Motor industry news

GoAutoNews is Australia’s number one automotive industry journal covering the latest news, future and new model releases, market trends, industry personnel movements, and international events.

Catch up on all of the latest industry news with this week's edition of GoAutoNews
Click here