Jaguar: Prefer Profit

Picture the scene. We're sitting at the kitchen table in the PAG household (that's Ford's Premier Auto Group). Disgruntled father Ford, stressed with bill payments, pounds the table with clenched fist, stares young, seditious daughter Jaguar square in the face and demands, "Why can't you be more like your sisters?" He points to her snide, adopted siblings; vixen Aston Martin, rugged Land Rover, and pudgy little sister Volvo, who with a mouthful of meatballs chimes in, "Ja, vhy kan't you? Dumhuvud."

No wonder Jaguar CEO Joe Greenwell is feeling unloved: Volvo and Land Rover are both doing solid business. There's a December waiting list for Aston's V8 Vantage. To avoid articles like this one, Ford doesn't break out profits according to individual brands. But according to British regulatory filings, Jaguar lost $1.1b in '03. The British marque's losses for '04 and '05 easily match– if not exceed– that figure, capping a sixteen-year flow of red ink. Jaguar's highly-touted plans to sell 200k cars a year? Gone. Last year, Jaguar built 120k cars. US dealers were flooded with 21k off-lease cars; these three-year-old Jags retained just 40% of their value.

It's not all bad news. J.D. Power & Associates recently rated Jaguar number one for customer satisfaction for the second year running. But those poor residuals, along with expensive sales incentives and shameful parts 'n trim cost-cutting (not seen since the 1970s), threaten Jaguar's viability in the US market. What's worse, Jag's entire lineup lacks sparkle. The flagship XJ sedan is a hollow cast of its aristocratic predecessor. The X-Type is an exercise in badge engineering that fooled few and backwarded many. The S-Type only briefly caught the public's imagination. And while the XK aged gracefully, its replacement is long, long overdue.

Last December, Ford took action: the Blue Oval wrote a $2.1b check to Jaguar for "restructuring." Ford executives claim the recapitalization proves the parent company's commitment to Jaguar. Given Ford's woes, the money is probably an ultimatum: perform or else. In 2004, when Jaguar Racing failed to bring home any F1 trophies for the fourth year in a row, Ford sold the franchise to déclassé energy drink maker Red Bull for $110m. Ford's willingness to cut losses shows that if bad came to worse, selling Jaguar to eager Renault is a practicable option.

To stave off that ignominious eventuality, Jaguar is sending the revamped S-Type down the pike, putting the X-Type out to pasture and leaving the XJ to soldier on. Jaguar's management pins their immediate hopes on sales of the forthcoming all-aluminum XK. Unfortunately, the "new" Cat lacks the very characteristic that Jaguar is selling these days: sex appeal. Sure, it's good-looking– but it's not the kind of drop-dead gorgeous that makes a Porsche 911 or Mercedes SL owner sideways aspirational. Parked next to the Aston Martin V8 Vantage (the car that shares the XK's platform) the Jaguar looks like Cinderella's ugly step-sister.

This does not bode well for a company built on "pace and grace." Mercedes AMG, Audi's S-Line and BMW's M products have obliterated any chance of Ford's Jaguar out-pacing the competition. Sexy is all the Cat's got left. While Jaguar's "Prefer Gorgeous" campaign demonstrates that company management understands Jag's unique position, the most sensual advertising in the world isn't going to help the marque if the products on the showroom floor are, well, blah. As it stands, that's how it stands.

Jaguar desperately needs a car like the original XK120 or E-Type: a machine that redefines automotive desirability for generations to come. The retro-styled F-Type concept car– strangled at birth to fund European diesels– could have been such a car. With so many superb platforms in the Ford empire, and nothing much to lose, what's stopping Jaguar from unleashing a show stopper?

The door is still open. Mercedes-Benz's "passionate" four door CLS500 coupe shows that sexy can't be reverse engineered. Acura, Infiniti and Lexus are stuck selling one aesthetic flavor: vanilla. Only Maserati can legitimately claim to sell genuinely sexy machines, yet like Aston Martin, Quattroportes are built on a bespoke basis. So it's not too late for Jaguar to design, build and sell the kind of visual aphrodisiac that will return the British marque to both glory and profitability.

At least Ford executives seem to understand that image is Jaguar's main asset, and the key to its future success. Hopefully, Jaguar has enough time and money to build products faithful to the brand's core values. In the meantime, the Jaguar brand is an old E-Type sitting in Ford's garage. Bill kicks the tires, caresses the lines and spends his fortune on the blessed car because, at the end of the day, owning it makes him look good. Now, if only the damn thing would start…

[Gunnar Heinrich publishes www.automobilesdeluxe.blogspot.com]