Jaguar Land Rover has been on a roll since separating from Ford in 2008. New models, new engines, new technology and new plants have more than doubled the automaker’s global sales to 583,312 last year.
But now the next — and far more difficult — challenge awaits: growing annual global volume to 1 million vehicles, a goal of JLR’s hard-charging German CEO, BMW-trained Ralf Speth.
Here’s a way JLR could do it quickly and more affordably than bringing back a dead and damaged brand such as Rover: Buy Vauxhall from PSA Group.
With the addition of the Range Rover Velar and the fifth-generation Land Rover Discovery, as well as filling out the Jaguar lineup with the XE compact sedan and F-Pace crossover, JLR’s volume should easily top 600,000 vehicles in 2017 — barring any dramatic economic disruptions.
More derivatives from existing platforms are on the way but will likely add only incremental sales and won’t propel JLR to 1 million light vehicles a year.
Adding Vauxhall to JLR’s corporate garage makes sense for JLR and for PSA. The real prize in the GM deal was Opel, which alone accounts for about 1 million vehicles a year. Vauxhall, consisting of rebadged Opels and sold only in the U.K., is excess baggage for PSA.
Vauxhall, which has its own dealer network and plant in Ellesmere Port, has seen its volume hold steady at around 250,000 vehicles per year in the U.K.
Vauxhall under JLR could expand into segments and markets that are not appropriate for Jaguar- nor Land Rover-badged vehicles.
Also, JLR engineers have been quietly working in India on Tata Motors’ core entry-level vehicles to make them more competitive in that tough market, so JLR engineers are gaining experience working on nonluxury vehicles.
I can envision JLR creating for Vauxhall a Subaru-like lineup of subcompact and compact all-wheel-drive sedans, hatchbacks, wagons and small SUVs powered by three- and four-cylinder Ingenium engines.
BMW is the company JLR has emulated most since the split with Ford. In fact, many of JLR’s top managers come from BMW, so it is no surprise that JLR is beginning to look a lot like a sort of British BMW.
But even BMW has a hedge against economic turmoil with Mini. That is a role that Vauxhall could play at Jaguar Land Rover.