What Tata is getting

Has the Jaguar lost the status race to the Mercedes Benzes, BMWs and Audis of the world?

For an emerging-market automotive business suddenly to have to assimilate a historic and globally known brand is a big deal. For it to have to do the job with another brand as well is going to stretch resources as well as credibility to the limit. Because, with Jaguar-Land Rover, Tata will be getting two very different car makes. Ford may have thrown them together expediently as a single unit, but as brands, they have little in common other than Englishness, histories and  costliness.

Land Rover is a relatively natural extension for Tata. The Indian company produces four-wheel drive vehicles and the local market has a natural requirement for that. Land Rover not only has peerless four-wheel drive technology and credibility but encompasses both utilitarian applications and aspiration. Land Rovers are seen everywhere from dust bowls to Hollywood.

That makes it perfect for the Indian market, ranging as it does from rural wilderness to cosmopolitan Mumbai. It’s a chance to underpin a brand-image purchase with lucrative government contracts for Defenders (a Land Rover model). And, importantly, Land Rover is a truly global brand, and is now making money.

But Jaguar is altogether more difficult. It has global awareness but is not a global brand - outside the USA (which accounts for 25 per cent of sales) and the UK, Jaguars are bought in small numbers. And it haemorrhages money. As a premium brand, there is no need for a Jaguar as there is with a four-wheel drive vehicle. Yet, at the same time, it cannot compete head-on with the benchmark German brands.

From Frankfurt to Shanghai, if you are a tycoon and want to let people know you’ve arrived, you do so in the back of a Mercedes. If you want to drive yourself, you do it in a BMW. If you want to tell people that you are tasteful and independent-thinking, you will be in an Audi. If you turn up in a Jaguar, you may be the CEO of a major British company, but you are equally likely to be someone’s dad.

But Jaguar’s brand has become a staid, stuck-in-a-time-warp anachronism. A car for older people. For men with hats and pipes. Its very Englishness is its strength and its weakness. It has heritage on which to draw, but it is parochial. Yet it is a paradox. Jaguar began as a sports car manufacturer, took on Le Mans and created the iconic E-Type. And in recent years it has embraced technology once again, deploying aluminium extensively.

The problem is that the styling has not kept pace with the technology, and the flagship XJ large saloon still draws its inspiration from a car designed in the 1960s. Think of how BMW styling has moved on since then, along with ts brand equity. Under Ford, several key mistakes were made. In an effort to increase volumes, the company took Jaguar into new, more affordable territory with the X-Type. People have said that this failed because the car did not look like a real Jag. It did — it was a scaled — down XJ.

But that is not what younger, more conscious customers with disposable income want. And for those who know their brands, the problem was that the X-Type did not sound like a Jag: compact, and more importantly with Ford Mondeo underpinnings including front-wheel drive.
 
And the S-Type failed precisely because it looked like a Jag — with a throwback grille transplanted from 1960s models, this was pastiche styling and the result was a confused hybrid directly expressing the company’s struggle to move on from its past and become truly contemporary.
 
But things have begun to change. The XK sports car signalled the return of competitive, interestingly-styled models with wider appeal and greater credibility. The new XF, which goes on sale shortly, is a daring, coupe-like competitor for the BMW 5-Series and Mercedes E-Class. Much rides on it but it has been received very well. At this level, $50,000+ cars, Jaguar is in the right place for its brand equity and the profit margins are greater. If a cheaper model is to play a part, it should surely be in the form of an affordable sports car. But Tata will still need to ensure that the next XJ — the model which means business — looks the part and can be a more serious rival for the Germans. Only then can the new owners capitalise on the brand’s heritage. Goodwill is not enough.

Mark Carbery is an independent automobile journalist and a consultant

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