What’s up with Jaguar these days? It must be hard for the company, with a proud heritage that includes Le Mans victories and the glory that is the E-Type, seeing its stablemate, Land Rover, soar while its sales have stagnated.
Globally, Jaguar/Land Rover sales have doubled since the company was acquired by the giant Indian Tata conglomerate in 2008. And the Land Rover itself is up 20 percent in the first eight months of 2015, compared to 2014. But Jaguar’s numbers, despite such gala new entries as the F-Type, slumped 4 percent in the same period. (Jaguar was up 5 percent in July, year over year, however.)
Jaguar has a new strategy, announced in Manhattan last week. It’s adding new models, cutting prices, and putting more standard features on the cars — all in a move to enter the luxury market in the middle, not in the top pricing tier. Oh, and the company is coming out with a "holy grail" car in this market, a compact SUV. Hail the F-Pace, on sale next spring.
The E-Type. No, this isn't the car in the Museum of Modern Art. (Photo: Steven Vacher/flickr)
I don’t love the idea of Jaguar SUVs, but the company would be crazy not to do it. Porsche’s bestsellers are SUVs now. In 2014, Porsche sold more Cayennes than Panameras and 911s combined. But don’t worry. This is the “compact luxury SUV designed for those who love driving.” I’ve heard that before, of course. Maybe driving will be believing.
“The E-Type is the most beautiful car ever made, according to Enzo Ferrari,” said Jaguar’s vice president of marketing, Kim McCullough. But the company isn’t wallowing in nostalgia, remember? Of course, the ads still flash that 80-year heritage past. Today, the goal is to “firmly establish a modern view of the brand for customers today, and win the future with our innovation.” The “emotional fulcrum” of the brand is the F-Type, she said.
Admittedly, the F-Type is very cool, though it has styling cues that suggest past glories. But Jaguar keeps insisting it wants to brand all-new models in our consciousness, and pricing helps to do that. Rob Filipovic, Jaguar’s head of product planning, quoted JD Power as saying that “price is the number one reason for a customer to reject the purchase of a luxury automobile.” Jaguars, he pointed out, “are at the top of the market, and we no longer want to be a high-priced outlier in the luxury market.”
Along with the new F-Pace, Jaguar is also coming out with a new entry-level compact sedan, the 2017 XE. Automobile, perhaps a bit over-dramatically, calls it the most important new model in the company’s history. It’s indeed hugely significant if the company wants to be a mass-market carmaker, and for comparison you can look at the $35,000, 200-mile Tesla Model Three that will open its waiting list next March.
And Jaguar’s price is right in that same pocket, $34,900 for the 25t model. Is it unusual for a carmaker to announce a price so far ahead of launch? You bet, but this announcement is part of a big strategy involving the “competitive value proposition.” The cars that were the most expensive in their segment are now going to be mid-pack, beginning in the 2016 model year.
The 2016 XF 35t, with a V-6, will be $51,900 (9 percent down from a similar last-generation XF). The F-PACE will have its “highly competitive pricing” announced at the Frankfurt Motor Show on September 14. (I’ll be there.)
Part of the same strategy is to give existing models more standard features at the same price. And also, in the best move, I think, to make standard a package called Jaguar EliteCare. Personally, I think the word “elite” is synonymous with expensive, but in this case all 2016 cars get free regular maintenance service, 24-hour roadside assistance, and a five-year/60,000-mile warranty. That’s a great idea because servicing Jags has never been cheap. As the onetime owner of a Mark X, I know.
I had one of these big boys, a Jaguar Mark 10, complete with Lucas electrics and Smith gauges. It's amazing it ran as well as it did. (Photo: Nakhon100/flickr)
McCullough again invoked JD Power by noting that “concerns over the high cost of maintenance and repairs” are among the top reasons people reject luxury cars. She bravely noted that Jaguar’s record for reliability “lags behind its actual performance.” But, of course, this is a British car, and jokes about their frequent failings are legion.
Q: “Why do the British drink warm beer?”
A: “Lucas refrigerators.”
This joke has more resonance if you know that every British car made in the '50s and '60s had Lucas (known as “The Prince of Darkness”) electrical equipment.
The concern with a move like this, adding entry-level models and lowering the bottom line, is that Jaguar will lose the upmarket cachet that goes along with uses of the word “elite.” Some people actually like paying high prices for things. But never mind. It’s the right move if Jaguar wants to move into the mainstream in the American auto market.
Sam Abuelsamid, an analyst at Navigant Research, also thinks it's a good,idea. "I think it’s actually a good strategy for them, but I wouldn’t necessarily call it going down-market overall. Jaguar’s pricing has been at the upper end of their respective segments for more than a decade without really offering anything compelling to justify those price points. The new pricing simply moves them into parity with BMW, Mercedes-Benz, Audi and Lexus."
Here's an F-PACE coming together on the road, in China I think: