JAGUAR EMBRACES THE INEVITABILITY OF THE MARKET.

By Peter M. De Lorenzo

Detroit. Jaguar is one of the most storied names in the car business. Gaining notoriety and street cred because of its innovative racing cars and sports cars from the 50s like the XK-120, the C- and D-Types, and the XKSS, and eventually the stunning E-Type from the 60s, the brand became highly desirable. Throw in some beautiful sedans over the ensuing years and the Jaguar name has resonated deeply with enthusiasts for decades.

It’s also no secret that Jaguar has suffered from a perception of poor quality that has lingered over the brand like a black cloud. And though much of that bad reputation was deserved, it’s really an irrelevant notion when it comes time to consider the modern brace of vehicles that defines the contemporary Jaguar.

But despite a stunning array of new Jaguars like the gorgeous F-Type Coupe, Jaguar sales are lagging, to the point that it’s grossly underperforming in the market. Jaguar marketers have found out - the hard way I might add - that having a significant historical legacy isn’t necessarily enough to motivate buyers in today’s market. And the reality for Jaguar is that its raison d’etre in this market is slipping, despite the slobbering fan boy reviews and splashy TV commercials.

So what is a brand like Jaguar supposed to do? The options are limited to say the least. Jaguar can’t out-German the German luxury automakers by chasing every segment niche – both real and imagined – because the brand couldn’t pull it off, even if it wanted to. And Jaguar can’t go all Kia on us overnight and head too far down market, because it would be totally inappropriate and simply disastrous for the brand, eventually killing it off altogether.

Considering the realities the choices are clear for Jaguar: 1. It can stay the course and keep bumping along selling 15,000 vehicles a year here in the U.S. market, functioning as a niche player in the luxury segment, or 2. It can try to move the needle in a positive direction for the brand once and for all.

Joe Eberhardt, the CEO of Jaguar Land Rover North America, rightly decided that the aforementioned Choice No. 1 was not an option for the brand, so Jaguar made a splash late last week by announcing that it was attempting to fix what ails it here in the U.S. market in one fell swoop, announcing a comprehensive 5-year/60,000-mile scheduled maintenance plan called EliteCare for 2016, and sweeping price cuts or additions of standard equipment across its entire product lineup to make the cars more affordable.

These moves were undertaken on the eve of the arrival of two new Jaguar model entries to the market, the smaller XE Sedan and the F-Pace crossover. At this point debating the efficacy of a Jaguar crossover is futile, because that ship has sailed. Every luxury auto manufacturer in the world is emulating the Porsche playbook, looking at that brand’s incredible success with first the Cayenne and now the Macan, and hoping to carve out a piece of the crossover frenzy for themselves. Jaguar is no different. It’s facing the inevitability of the market.

Are these moves logical? Yes, if Jaguar wants to survive here profitably, they are absolutely essential, at least to a point. A scheduled maintenance plan is such an obvious solution I can’t believe the brand didn’t do it years ago, while the price cuts and added standard equipment are designed to motivate consumers to bite on the contemporary attractiveness of Jaguar rather than its historical legacy alone.

Is there a danger involved with these moves? Absolutely. Talk within the industry is that there’s a hint of desperation attached to these moves. When you’re not moving the needle nearly as much as you should, that kind of scuttlebutt is inevitable too.

There’s another factor in this that merits discussion, and that is that in one of his previous auto lives “Joltin’ Joe” Eberhardt was one of the chief architects of the Mercedes-Benz brand strategy that suggested that the brand needed to become more “approachable.” That the stumblebums in Mercedes marketing mishandled that notion is undeniable, to the point that it was almost disastrous, but fortunately cooler heads prevailed to pull the brand back from the brink. The point being here that Eberhardt’s track record is suspect, and by moving Jaguar down market – and make no mistake, price cuts and added standard features is exactly what this is about – he is running the risk of turning Jaguar into Just Another Car Company.

But is it really all that much of a risk? The luxury car market is being commoditized to the point that it is scary. The uncommon, unique and truly “new” only stays that way for a brief fleeting moment before it becomes common, predictable and expected. The democratization of technology and luxury is taking its toll, which is why – as I’ve hammered on repeatedly in this column – Brand Image is so damn important.

Take Porsche, for instance. It’s no secret that Porsche has been savvy, shrewd and borderline brilliant in managing its brand, despite forays into unexpected product programs. The fact that Porsche has topped the Autoextremist Brand Image Meter for three straight years is no accident. And Audi, BMW and Mercedes have managed to hang on to, if not solidify, their brand images despite some questionable product programs, too, although they’ve been notably less successful at it than Porsche.

But this is where it gets a little tricky for Jaguar and Eberhardt & Co. What is the Jaguar Brand Image, exactly? Is it the creator of compelling luxury-performance cars with a distinctive point of view and a historical legacy unmatched by all but a few car companies? Or is it now being transitioned to becoming a “me-too” mainstream luxury brand with an evocative name and logo but little else to distinguish itself?

Jaguar has decided to embrace the inevitability of the market head-on which, on one level, is commendable.

But make no mistake, success for Jaguar’s new course is not inevitable.

And that’s the High-Octane Truth for this week.

(Jaguar)

(Jaguar)
The Jaguar F-Pace crossover will be officially unveiled at the 2015 Frankfurt International Auto Show. Watch a teaser video here.