RAC Cars News


How Jaguar brought it all back

By raccars Published

Just over a half-decade ago, Jaguar Land Rover was threatened with the possibility of having to pull the plug on a once great British franchise. Looking at their sales figures for 2015, you might think otherwise.

A Damaged Economy

With the global recession in full swing, the year 2008 was difficult for many enterprises, the automotive industry included. In November of that year, 97,604 cars were manufactured in the UK, a number one third lower than the same time 12 months prior. The effects of the economic crisis were apparent – a loss of demand for motor vehicles, coupled with the inability to attain credit, produced a crippling slowdown in car sales.

Whilst automakers such as Nissan and Ford faced declining profits and imposed production cuts, none were hit as hard as Jaguar Land Rover. Despite staple models such as the XF, and a well-received revision to the ubiquitous XJ, sales were lacking at best. The company, formed when Indian automotive giant Tata Motors acquired both the Jaguar and Land Rover marques, had to weigh up a tough decision – accept a less-than-advantageous partnership via the government’s business department, or risk collapsing less than a year after its conception.

Make or Break

The first of the two options, whilst seeming the most logical, carried with it some clauses that could have undermined the integrity of the Jaguar Land Rover brand, including the right to dictate future redundancies and free reign over who was appointed chairman. Ultimately declining the offer, Jaguar’s gamble, under the guidance of Tata Motors, paid off handsomely. In part to do with a favourable exchange over in areas such as India, as well as the reputation of British built cars over in large markets such as Russia and China, Jaguar Land Rover began to see its sales climb in late 2010, with a profit of £1 billion.

This turnaround led Tata Motors to consider the possibility of further growth for the company, something that was at the forefront of the Jaguar Land Rover initiative. In March 2011, Jaguar Land Rover announced that following investment by Tata Motors, it would be hiring an additional 1500 staff, as well as signing contracts worth £2 billion to UK based companies in order to begin production on the newest model in its range – the hugely successful Range Rover Evoque compact SUV.

On the Rise

The same year, Jaguar Land Rover went ahead with plans to build a new engine plant based in Wolverhampton, which would focus primarily on four-cylinder petrol and diesel engines, plus an increase of 1000 staff to its already established Solihull plant, increasing the workforce by 25%. A joint venture between JLR and Chinese carmaker Chery included a further $2.78 billion investment to develop the Jaguar range, a process that would create 4500 jobs over the next five years. Demand also increased greatly in 2013, with record sales for luxury vehicles in China, North America and Europe.

Along with additional investments and jobs being created (including a research and development centre due to open in 2017) Jaguar looks set to continue its current successes. Jaguar’s XE was released in 2015 to a great reception, and was one of many wins for the company that year, whose 9% year-on-year production rate contributed to a huge number of cars being manufactured that year – an amount not seen in a decade. The newest Jaguar, the F-Pace, is the first in a line of SUV models for the company and as such is widely anticipated.

Without a doubt, Jaguar's startling turnaround has had a massive effect on the rebalancing of the automotive industry. The only question is for how long?

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