Tough decisions lie ahead, but the crisis may have created a leaner JLR that's ready to accelerate again.
07 Dec 2020 | 14498 Views | By Jim Holder, Autocar UK
Jaguar Land Rover's problems started long before the pandemic, with its Charge and Accelerate and Charge+ programmes having been launched as it scrabbled to save an almost-inconceivable £2.5 billion (Rs 22,647 crore) in 18 months back in 2018 as Chinese and American sales slumped and the collapse of diesel hit ...
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Jaguar Land Rover's problems started long before the pandemic, with its Charge and Accelerate and Charge+ programmes having been launched as it scrabbled to save an almost-inconceivable £2.5 billion (Rs 22,647 crore) in 18 months back in 2018 as Chinese and American sales slumped and the collapse of diesel hit it especially hard, its sales mix having peaked at around 90% of the total.
Thousands of job losses followed, as did tales of no-holds-barred penny-pinching. Now laughably, staff often complained that they weren’t allowed to take the train from the Midlands to London for meetings, instead being told to dial into a video conference.
But for every charge, it still felt as though JLR was struggling to accelerate, caught on a conveyor belt of the world’s wider issues in the shape of Trump, China, diesel (even with a committed hybrid rollout) and Brexit; and poleaxed by a product line-up that risked losing its swagger on the Land Rover side prior to the arrival of the new Defender and never even hit its stride on the Jaguar side, the far-reaching but low-volume and low-profit I-Pace aside.
So the company found itself at a crossroads, just as the industry as a whole did likewise, caught in a vortex of cost-cutting at exactly the moment it needed to be investing in electrification, autonomy and more, as well as needing to shake up its existing range to better reflect buyers’ tastes. While much noise was made about protecting R&D budgets, it’s implausible to think all the money kept flowing – and there were more than enough whispers of delayed or curtailed projects to confirm that. And then Covid-19 appeared.
But what could have been a death blow, or at least a blow hard enough to push JLR into a joint-venture or merger, was not. Thanks to its wider issues, JLR went into the pandemic leaner than most and, notably, made a profit last quarter off the back of encouraging revenues. Its troubles are far from over, but could it be that the pain of past years is what has saved it now?
Nothing is yet certain at JLR (or anywhere else in the world), but while new boss Thierry Bolloré has kept a low profile thus far, there have been snippets of decisive action: a new group role for former design chief Gerry McGovern, whose Midas touch gets a wider audience, plus the creation of a new senior role for a head of quality and customer satisfaction (has any manufacturer ever more needed to overhaul its standards and, to be fair, perceptions in this area?) point to a decisive start.
Maybe, just maybe, the coronavirus has been the leveller that JLR needed. A rough Brexit could set it back again, and surely there are more tough decisions ahead, but it could be that the time is finally right for a leaner JLR that’s keener to accelerate again.