Even in the midst of recalls, you’ll rarely if ever hear auto executives speak frankly about their brand’s alleged history of making “bad cars.” That’s just what the new management over at Jaguar did. The historically British brand, now owned by Indian giant Tata, had become known for building beautiful machines that had the dubious reputation of not quite running as well as their fanbase has wished, often leading to high maintenance costs and low resale value. Now the brand is now set on addressing that problem head on, with price cuts, a new set of perks and longer-term warranties.
“The times of bad cars are over,” said Joe Eberhardt, president and CEO of Jaguar Land Rover North America in interviews during last month’s Monterey Car Week. “This is the next generation of Jaguar. But we need customer confidence to get there.”
Eberhardt went into detail about the perception of Jaguar when he said, “We have been perceived as a low-volume, high-priced brand,” the executive said. “Jaguar has the reputation that we build unreliable cars that are expensive to maintain.” The recent Jaguar announcement seems poised as their new campaign to persuade prospective buyers to give Jaguar another look.
The company has turned expensive options into standard equipment on many models, lowered prices on many vehicles but most notably they are offering new extended warranties, while also introducing two new entry-level vehicles that it hopes will expand its reach to younger, more mainstream consumers.
All vehicles in the 2016 model year lineup will include five-year and 60,000-mile limited warranties, and free (you read that correctly) scheduled maintenance for the same period.
Their brand shakeup is not limited to that though. In terms of a product lineup, the company will also shortly unveil the 2017 XE, which at a starting MSRP of $35,895 will significantly lower the entry point for the brand, and the 2017 F-Pace, a crossover utility vehicle that will expand Jaguar’s reach into a segment it has never occupied.
Jaguar Land Rover — at one time two independent brands but later united and owned by BMW and by Ford — was acquired by the Indian automotive giant Tata in 2008. The parent company has invested about $30 billion into the brand, Eberhardt said, over the last five years.
The company reported earlier this week that Jaguar sales for August were down 3% from August 2014, though sales of the F-type were up 15% for the same period. Jaguar’s 2015 year-to-date sales are off 4% from 2014, the company said. Sales at sister company Land Rover were better, up 12% for the month over August 2014, for its best year ever. Year-to-date sales are up 20%, the company said. Eberhardt believes the F-Pace and XE will sharply expand the brand’s visibility, especially among younger buyers, and markedly increase sales – a point echoed by marketing Vice President Kim McCullough.
“Starting this year we will be reaching a far larger target audience that includes a significant number of affluent millennial customers,” McCullough said. “This opens up a new segment to us, with vehicles that will make the brand more accessible.”
The challenge, according to Kelly Blue Book (the most prominent vehicle valuation and automotive research company) analysts, will be overcoming the brand’s reputation as a troubled prestige nameplate.
Akshay Anand, one of the Blue Book analysts has said, “The brand has had issues” with the perception that the cars are unreliable and unattainable.” He went on to say, “the cars have gotten better, and the XE and F-Pace are the cars that will get new people in the door,” according to Anand, these new vehicles could be what dictate Jaguar’s immediate success.
The new warranties will also help reassure some buyers, but the company might still need to establish a quality track record. The warranties will help hold company engineers accountable but ultimately it’s the consumer experience when behind the wheel that will make Jaguar. For example, if the XE is to succeed, it will have to be an attractive vehicle and offer compelling options to compete with the already successful Mercedes C-Class, BMW 3 Series and Audi A4 automobiles that share that market segment.
Eberhardt hopes that the long-term warranty will be seen as his company’s best effort to reassure drivers that they are not taking a gamble on these cars. “Because of issues in the past, people don’t think of us as a reliable choice,” he said. “That’s where we face the biggest hurdle.”
Initially, Jaguar announced the new warranty and service deal, now called Jaguar EliteCare, only for the 2016 F-type. The automaker will extend it this fall to the 2016 XF and XJ, plus the 2017 XE and F-pace next year. The new InControl Remote & Protect, the company’s smartphone app and call service, is included for five years or unlimited miles. Of course, Hyundai, Kia, and Mitsubishi have been leading the industry with their 10-year/100,000-mile powertrain coverage (paired with a 5-year/60,000-mile limited warranty). However, Jaguar’s coverage stands at or near the top among luxury brands, although several competitors offer longer periods for powertrain and roadside assistance such as Acura, BMW, Audi and Mercedes-Benz. Despite this, many auto industry insiders believe that this is an important first step for Jaguar.