BIRTHS
Born in l927, Swallow Cars first produced bodies for Austin, Fiat, Standard and Swift chassis. By l928, the company had moved to Coventry and within three years, the Swallow saloon car version of the Standard was born as the SSl.
The name Jaguar did not appear until l936 and Jaguar Cars Ltd., did not arrive until l945 when it dropped the ‘SS’ prefix. The company continued to go from strength to strength and in 1960 it acquired the Daimler company.
But changes in the automobile industry were afoot and in 1966, a struggling Jaguar joined BMC to form British Motor Holdings, which then merged with Leyland Motor Corporation in 1968. Within a few years, British Leyland, then under the control of the British government, assumed control and in l975 the much-loved Jaguar E-Type was discontinued.
In spite of its inconsistent performance, Jaguar continued until it was privatised once again in 1984 only to be taken over by Ford Motor Company on December 1, l989. Now, still ailing under Ford’s care, well-wishers hope the inevitable won’t happen.
DEATHS
But Jaguar Cars could soon join the roll call of has-beens from the Midlands. Shortly we could read the Jaguar obituary – 2008, killed by poor management and short sightedness on the part of the product planners. It was good to know you – rest in peace.
MARRIAGES
However, there is an alternative: instead, under BIRTHS we could read:
Jaguar reborn, thanks to an unexpected saviour, Tata. After all, Tata already sponsors work at Warwick University where 80 automotive engineers are working on research and development for Jaguar – who else? We in the UK can bury our heads in the sand and ignore what’s taking place in the big world outside our shores. Ratan Tata, chief executive of what really is a conglomerate, has big ambitions – and they seem very likely to come to fruition as far as Jaguar is concerned.
Remember that India is producing more highly skilled and qualified automotive engineers today than any other country in the world.
THE CURRENT STORY
Is it too soon to write an obituary for Jaguar, the company that has given us so many classics and favourite sports cars over the years? Or could Jaguar be reborn? It most certainly can be.
One has to ask the question, that if Ford cannot turn Jaguar into a viable entity, then who can? Ford bought the ailing Jaguar in 1989 and invested heavily in the company over the ensuing years benefiting the Coventry manufacturer in the areas of R&D, technical expertise and greater global distribution.
In a similar way, when Rolls-Royce went the way of BMW and Bentley slid into the arms of VW, these two great British marques benefited heavily from manufacturing and systems synergies at almost all levels. And that is not to mention the comfort of knowing that both of these very British institutions which had struggled financially for much of their recent past, now had access to Big Brothers’s wallets. Although the Ford/Jaguar marriage pre-dated these other deals, it was hoped that the outcome for the Coventry firm would bring benefits similar to those which Rolls-Royce and Bentley now enjoy.
Sadly though, the Jaguar spirit that once was an almost tangible asset at Browns Lane, has all but gone. One might ask what it was that produced such loyalty among its employees, and you could expect to be told that Jaguar cars were the best cars in the world, that the cars themselves had a soul of their own. Such an unusual commitment could only come from a workforce that was motivated and prepared to work long hours because they were proud to be associated with the Coventry marque.
But Dearborn doesn’t understand that. Over there, if you want to bring a new model to market, you call in the MBAs, the number crunchers and the marketers who then tell the market what they will get. Design is then done by committee and the results fed into a computer, at which stage the engineers are told what they can or cannot build. One just has to look at the state of the American car manufacturing industry today, to see that Japanese makes are king of the road there.
So what has changed Jaguar’s fortunes to the point that they are such a thorn in the flesh for Ford? The answer is that the American parent has tried to run Jaguar just as they run their other corporate divisions – that is, without soul. That might sound a bit harsh, but the reality of the company’s enormous financial losses in the American auto industry speak for themselves.
Ford’s solution is to sell Jaguar. But it is not as easy as that, because Jaguar has been dipping into the Ford parts bin since 1989 and any buyer would have to have access to a very large parts bin to have any hope of turning Jaguar around.
One of the potential buyers for Jaguar today is the Tata company of India, which has recently become proud owner of Corus, while another is the Mahindra & Mahindra company – all of whom have extensive auto manufacturing experience. But the odds are on Tata.
Tata may be producing cars, but it is very unlikely that Jaguar could dip into the Tata parts bin, and then there is the important issue of distribution. As Tata is not sold globally, it is more likely that Tata would benefit from Jaguar’s distribution network rather than the other way around.
On the other hand, several different groups of venture capitalists are also in the running to buy Jaguar, which poses yet another challenge, as just having very deep pockets with loads of cash floating about will not solve the problem either. The same issue crops up here as well – if Ford could not do it, then what makes these capitalists any different? They are still going to have to tie up with another manufacturer somewhere, in order to keep the company viable.
One of the biggest problems facing any buyer of the Coventry firm is going to be the ‘Bill of Materials’. If Jaguar has been losing money for Ford for so long, and in such big bucket loads, despite having access to the right quality and quantity of parts, then finding a suitable buyer for the company is going to be harder than most realise. You cannot just buy the Jaguar name and move everything to India and carry on making Jaguar cars as though you were back home in Coventry. It is not that kind of brand, and we have seen how badly that kind of identity transfer can work out, and that was just with a change of parent, not relocation.
Another major obstacle facing any potential buyer of the Coventry firm is that it now has an ageing model range. The XJ has been around for ages and is quite frankly now an old man’s car, whereas the X-type, sadly, has never risen to its full potential. With the S-type being phased out, its replacement, the new XF is a confusing interpretation of Jaguar’s future design direction. Unfortunately this vehicle, while it may be extremely reliable and well made, lacks the emotional appeal and presence of an old Mk II. The XK on the other hand is an extremely capable sports car but does not carry the baton passed onto it by the E-type.
This leaves any potential purchaser with a major headache, because they will have to come up with new models and revolutionary designs, all on day one. Unfortunately with Jaguar manufacturing split up and located at various sites around the UK, there is no longer the Jaguar spirit which once existed at Browns Lane. The Jaguar culture referred to here was in fact its competitive advantage, and as this no longer exists, this means that Jaguar is now competing with the likes of BMW, Audi, Lexus and the many other similar makes in that highly competitive market segment. Jaguar have sadly lost the one thing that set it apart from the rest of the market – its most valuable asset, emotional appeal.
Marketing words such as ‘gorgeous’ and ‘stance’ and ‘attitude’ don’t unfortunately sell cars if those cars are too similar to other makes on the market. You cannot manufacture the ‘icon’ into a car, it is the public who will decide what is gorgeous or which car becomes an icon, and they will do so with their wallets. The Jaguar Mk II was never ‘marketed’ in the way in which Jaguar cars are today, because the Mk II’s natural emotional appeal did that without the support of any multi-million pound advertising campaigns.
Jaguar was never a brand, and Ford’s failure to understand the difference between this and a marque, is part of the reason why they were unable to build on that car’s biggest asset. Despite Jaguar’s unreliability in the 1960/1970s, and even later, often due to their electrics, they sold well and made their founder, Sir William Lyons, very rich. Today, Jaguar’s are more reliable than they have ever been, and yet their dealers battle to shift metal off the showroom floor. ‘Why?’ you ask – because the cars have lost their emotional appeal. There is nothing inherently wrong with the cars mechanically or design-wise, but therein lies the problem, they are all just a bit too ‘ho-hum’.
The most important car that Jaguar never made was the F-type, a small sports car that Jaguar would have battled to supply in sufficient quantity, if the tens of thousands of pre-paid orders was anything to go by. Politics killed that one.
So what are the options for Ford? If the buyers who are currently on the table all fall by the way, then Ford will end up with a company that nobody wants, least of all, Ford Motor Company of Dearborn, Michigan, US. The only option then would be to close Jaguar and sell the assets, an option that would not raise much cash for the parent company, and not to mention the prohibitive cost of severance pay for the 12,000 staff and the army of high-earners. Not an enviable position to be in.
If Jaguar is to succeed in the future, it must reinvent itself, perhaps from a smaller base, but for that to happen, it must have people steering the ship who understand the Jaguar marque. Emotional appeal was once Jaguar’s biggest competitive advantage, and any future owner of the once-famous Coventry marque will have to work doubly hard to recreate that. But create it they must or we journalists will all be busy writing obituaries and bewailing the loss of what could and should have been a marque with a bright future and leading a revolution in automotive design and engineering.
Glen Smale
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