By on April 24, 2019

2019-land-rover-discovery-svx-downhill

Jaguar Land Rover finds itself in a truly unfortunate situation. Like many manufacturers, it mistakenly presumed China would be a continual source of sales growth. But JLR also has to contend with the uncertainty of Brexit and tightening emission rules across Europe. The one-two-three punch helped contribute to the $4.4-billion loss the company posted in its latest quarterly earnings report. Having also lost cash in the previous two quarters, the automaker says it will probably need to reduce its 42,500-person workforce by around 10 percent this year.

While there isn’t much to be done about the economic uncertainties surrounding Brexit, which now seems to be perpetually stalled, China really should have been better to JLR. Unlike their mainstream counterparts, luxury vehicles have fared much better in the Asian market. Unfortunately, it was not to be for Jaguar Land Rover; the company is now looking at North America the way an injured tightrope walker might view a safety net. 

Despite China’s luxury market continuing to grow (for the most part), Land Rover’s annual sales dropped by nearly a third in 2018. Meanwhile, Jaguar stayed relatively constant — witnessing a very modest amount of growth over the same period. But it still ended in a loss, adding to the company’s problem of dwindling global sales.

According to Automotive News, China’s about-face may have something to do with regional quality control. Earlier this decade, Tata, JLR’s parent company, decided to shift production to China to better cater to local tastes and avoid the 25 percent tariff imposed on all imported vehicles. While this did lead to a sales surge in 2017, quality took a nosedive. Its joint venture with Chery Automobile apparently worsened the company’s already middling reliability credentials, resulting in a swift backlash against the automaker.

From Automotive News:

In China, as well as in the U.S., both brands routinely rank well below the industry average for new and 3-year-old vehicle quality and dependability, based on owner surveys by J.D. Power and Associates.

In 2017 alone, JLR carried out 13 recalls in China for defects with components ranging from engines, instrument panels and airbags to batteries. The recalls covered some 106,000 vehicles, which was equivalent to more than 70 percent of its local sales during the year.

Since August, Jaguar and Land Rover owners have regularly protested in front of JLR’s China headquarters in Shanghai to bring attention to widespread quality problems they allege with their cars and SUVs.

The company’s singular bright spot resides in the West. While global volume may be down, Jaguar Land Rover’s 2018 sales increased 7.3 percent in the United States to a record of almost 123,000 vehicles.

“If we can keep our volumes around where we were last year, I would be more than happy,” Jim Eberhardt, JLR CEO for North America, told Bloomberg at last week’s New York Auto Show. “We focus on the things we can control.”

As the automaker’s largest market, Jaguar Land Rover is praying American tastes won’t change in 2019. It seems like a safe bet. While crossover and utility vehicle sales don’t seem as though they could possibly get any higher, they also don’t seem to be on the cusp of becoming passé. That’s good news for the next-generation Defender, which Land Rover says should arrive in the U.S. in 2020.

“There is always room for further growth and the growth will have to come from new product,” Eberhardt said.

Still, it’s doubtful whether the Defender can set things right by itself. Tata is rumored to be examining its strategic options for Jaguar Land Rover, including a potential stake sale of the company. It needs to manifest $1 billion in 14 months to replace maturing bonds — not an easy feat, as it also needs some dough left over for continued investments into expensive EV development programs.

[Image: Jaguar Land Rover]

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36 Comments on “USA to the Rescue? Jaguar Land Rover Banks on American Excess During Troubled Times...”


  • avatar
    Hummer

    42,000 people working for a minivan manufacturer with middling sales how many geniuses did it take to see this issue? I hope that includes dealership employees across the globe.

    • 0 avatar

      I’m in a prime JLR market, new ones have become somewhat rare. They really need to update the RR and RR sport. I see some new evoques and discoveries (looking like an uglier explorer) but nothing else really from JLR. 10 years ago I saw a lot more.

      • 0 avatar
        random1

        Same here. Lots of LR3/4 around, and some RR and Sport. No new D5 though, at all. That thing is comically ugly, with all sorts of form over function mistakes. Just awful.

  • avatar
    stingray65

    British brands known for poor reliability and build quality, owned by Indians known for low quality and organizational skills, and built by Chinese known for terrible quality and corruption. What could possibly go wrong?

  • avatar
    FreedMike

    Not to advertise a competitor, but this story in C/D illustrates how far sideways this brand has gone:

    https://www.caranddriver.com/reviews/a25574981/2018-range-rover-velar-reliability-maintenance-20k-update/

    Besides being shocked – shocked, I tell you! – that this thing has all kinds of reliability issues, check the stat sheet. What we have here is a CUV that’s about the size of a Ford Edge, with the same basic engine setup (a 2.0T), will get beaten badly at a stoplight by said Edge (or a well-driven Civic,for that matter), has crap reliability…and costs $67,000.

    I’ll say it again: Sixty-seven large for a CUV with a 2.0T and reliability issues.

    Then we have Jaguar, who persists in making cars with interiors that get outclassed by a Kia.

    These idiots deserve to fail.

    • 0 avatar
      PrincipalDan

      Yeah if you want something “different” and “European” – Buick will gladly sell you an Opel for 1/2 that or less than 1/2 that.

    • 0 avatar
      SCE to AUX

      Hey, my two Kia interiors are pretty nice. :)

      As for Jaguar’s interiors, most of them are *very* small, with low headroom. This alone could torpedo sales in the US – Americans don’t fit in them.

    • 0 avatar
      dukeisduke

      I’ve seen a few of those Velars already, and I just shake my head every time I see one. They’re status symbols, pure and simple. Absolute garbage.

      Hopefully the people driving them are leasing them, and are smart enough to run away from them when the leases are up. But I doubt it.

  • avatar
    Tstag

    For what it’s worth I think the Defender could smash it out the park for Land Rover in the USA. It will come in two sizes and will also have a truck version. Defenders tend to look really tough which I think will appeal in the US and I think it will steal quite a few sales from Jeep. Lastly it will also be priced attractively.

    I think sales could be so strong Land Rover might even think about US production.

    • 0 avatar
      Lie2me

      They look like Ford Explorers, which is good for Ford

    • 0 avatar
      Rocket

      Jeep has nothing to worry about from JLR. From Ford maybe, but nothing wearing a Rover badge will threaten Jeep’s dominance.

    • 0 avatar
      scott25

      There’s no way the new Defender will meet expectations. It’ll cost significantly more than the already overpriced Wrangler for starters, and has a totally different image and audience. The redneck crowd wouldn’t be caught dead in one.

      It’ll also look pretty toylike if the spy shots are to be believed, and it’ll feature the famous JLR reliability to top it off

  • avatar

    Tata, welcome to the party! Now you understand why you bought JLR at discount.

  • avatar
    JohnTaurus

    OMG JLR is doing so well now that they’re out from under ghastly Ford. Nothing but sunshine and blue (but not *that* kinda blue) skies from here on out. Nope, nobody but Ford was stupid enough to sink a pile of cash into both, have a middling improvement but virtually no return on the investment and then sought ways to get out of the mess. Get rid of the problem (Ford), get rid of your customer base with styling straight out of the Kia studios (looking mostly at Jaguar, all they really need is a subtle “Tiger Nose” grille treatment and they’d be completely indistinguishable), and what can go wrong?

    Where’s Z71_selfie/EcoBoostFlex to really lay down some unsupported, unsubstantiated opinions that prove it was Ford’s fault all along?

  • avatar
    deanst

    “As the automaker’s largest market, Jaguar Land Rover is praying American tastes won’t change in 2019. It seems like a safe bet. ”

    This sentence tells me the automakers largest market is Jaguar Land Rover. Please hire an editor.

  • avatar
    Sceptic

    “Since August, Jaguar and Land Rover owners have regularly protested in front of JLR’s China headquarters in Shanghai..”

    But, but my television told me that there is no democracy in China!

    • 0 avatar
      FreedMike

      LOL, the government probably doesn’t care about them protesting a company. But let them protest the government…well, we all know how that turns out in China.

    • 0 avatar
      ToddAtlasF1

      They’re protesting an Indian company. This doesn’t say much about the ability to protest the Chinese government without Bill Clinton’s campaign financiers embedding you in a tank tread.

    • 0 avatar
      onyxtape

      The Chinese are known to be 1000x more “I demand to speak to your manager” Karens than the average American consumer.

      But yeah, as long as it’s not affecting the government’s bottom line, they can pretty much do and say anything they want.

    • 0 avatar

      I remember in Soviet Union you could protests Vietnam War and American Militarism and Imperialism all day along. I personally was carrying chicken foot and “Yankee go home” signs on my bag to school. Our school rock band was playing songs condemning American government like “People Let’s Stop the War” at max volume. I had a hearing loss for couple of days after that.

  • avatar
    Rocket

    For an SUV company to be struggling in today’s market really says something about the brand’s quality and reputation.

    • 0 avatar
      ToddAtlasF1

      My neighbor has three of them and I’ve never seen him stranded in the parking lot. It’s a win-win, really. He always has an SUV that starts, and Land Rover got to sell two Evoques and a Sport instead of just one car. It really makes Lexus’ approach to RX350 quality and reliability look silly.

  • avatar
    dukeisduke

    JLR’s motto: “There’s a sucker born every minute.”

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