15 October 2013

Can Jaguar Pull It Off?

Pull what off? A 3 Series competitor of course, due to hit UK showrooms in 2015. The reason for doing so is that while Jaguar has gone from perennial loss maker under Ford to a profitable business with Tata, it is felt that it needs to keep pressing forward to remain a successful brand. If the expand strategy works, that will make Jaguar so much stronger (although they could remain as they are and be OK). Still, fortune favours the brave and this is taking Jaguar out of the safe zone it currently is in. So why is it a risk?

Well the 3 Series market is a volume one, unlike other segments Jaguar is at present. Jaguar has neither the production capacity nor extensive dealer network required to sell this new car in anything like the numbers it needs to make it profitable. Not unless it makes it more a superior car and positions it above the competition in price. In that way the smaller numbers could be covered with greater profit per unit. Even then breaking even would be a victory. (After that a sportbreak model would follow).

Then the long overdue SUV - which will use the same platform as the car - and that is where the real profit will come. SUVs are not as volume sensitive, so a sporty crossover is what will make this whole exercise work. Then possibly a coupe version of the car model to finish off the range nicely.

Summary: It is what Jaguar need to do. However, the production volumes mean that the German competition won't be too worried about Jaguar's expansion...for now at least. JLR would have to pass a million cars before they really were making inroads. That will be some time away, even if the new car is a runaway success.

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