Wunderkind
Chicane Challenger
Daimler will only consider taking over Aston Martin if its handed to them on a silver platter.
Jaguar Land Rover tries to get BMW/VW engines
- Thread starter Kilcrohane
- Start date
Daimler will only consider taking over Aston Martin if its handed to them on a silver platter.
Wunderkind
Chicane Challenger
Systems integration will be a nightmare.
EnI
Piston Pioneer
No carmaker wants to be a mere supplier of a certain part (to some other carmaker). Therefore partnerships are signed or even cross-exchanges of shares are done etc. Everybody seeks collaborations that are mutual & are bringing synergies.What I see in AM-Daimler "partnership" is that AM gets more than Daimler - which in this case is just an engine supplier to AM.
Regarding BMW ... they were hit hard in Saab case where a contract had been signed to supplies Saab with engines, and then Saab went into bankruptcy - and the deal was off.
So, partnerships / supplier deals with small or even niche carmakers are risky. Really don't understand what's Daimler's business case when dealing with AM. Are they planning to acquire the company / brand in some foreseeable future? Otherwise the risk is too big ... to just rely on such a buyer of your parts. I don't know. I hope Dr. Z knows well what he's doing. On the other hand ... the partnership with Renault-Nissan makes much more sense & brings really huge synergies (engines, platforms etc) - not only when it comes to passenger vehicles but also in the case of commercial vehicles (cargo vans, trucks etc).
Regarding BMW ... they were hit hard in Saab case where a contract had been signed to supplies Saab with engines, and then Saab went into bankruptcy - and the deal was off.
So, partnerships / supplier deals with small or even niche carmakers are risky. Really don't understand what's Daimler's business case when dealing with AM. Are they planning to acquire the company / brand in some foreseeable future? Otherwise the risk is too big ... to just rely on such a buyer of your parts. I don't know. I hope Dr. Z knows well what he's doing. On the other hand ... the partnership with Renault-Nissan makes much more sense & brings really huge synergies (engines, platforms etc) - not only when it comes to passenger vehicles but also in the case of commercial vehicles (cargo vans, trucks etc).
Kilcrohane
Porsche Perfektionist
Hello again folks. Sorry I didn't reply sooner. Here's some acknowledgements and responses to the points raised.
@Giannis, Merc1, Amat46, Kowalski, Mr. Mercedes - thanks guys.
@Giannis "So you both think this will be a turning point for Jaguar, ending either bankrupt or under some new parent company?"
- yes, in a word, but more likely under a new parent, having bought the brand names - bit like VW wanted to get the Alfa Romeo brand without the baggage of the existing car range and factories.
@Merc 1 "They will just have to lean on Tata for the money to update and/or design new engines. They won't go out of business IMO. They're on the upswing now and to pull the plug now would just be unthinkable."
- that's the problem, Merc1, Tata (Motors) is in more trouble than JLR behind the scenes. It's a bit like the tail wagging the dog - I mean that it is JLR's current cashflow that is propping up Tata Motors, and not the claimed billions of pounds a year being pumped into JLR by Tata. Without JLR right now Tata Motors would be bust. Tata Motors is being hit by the double whammy of massively increased competition in the Indian passenger vehicle market by the likes of VW and Ford, and the Indian economy itself is a basket case, with shrinking total GDP. Any real profits being made by JLR are going straight into propping up the dire situation of Tata Motors and so of course starving JLR of the funds to do serious, very expensive engine programs, genuinely new vehicle platforms etc., which helps to explain why a company supposedly making over $1 bn a quarter in profits cannot apparently afford to make a separate engine block for its V6 petrol engine.
As to pulling the plug, Tata should have done precisely that by cashing in with an 'IPO', stock market flotation, when the 'JLR Fairytale' was at its zenith, between around early 2012 through to mid 2013, post the Evoque's massive launch fanfare, the massively hyped new 'lightweight' Range Rovers, and before the bubble began to start being pricked with the dawning realisation of how incredibly poor and overpriced the overweight F-type is, and then the pretty much coup de grace currently being delivered by the both excellent Macan and Mercedes GLA, attacking the JLR cash-cow Evoque from above and below respectively. Basically, they missed the boat.
Back in mid 2012 the dreaded 'analysts' and industry 'experts' were pompously declaring JLR could/should be worth as much as $20bn for Tata in an IPO, compared to the $2.5 bn they paid for it in 2008.
I said elsewhere to GCF in 2012 that Tata if they were smart should get rid of JLR through an IPO or even a trade sale for less money, but leave it to some other sucker to deal with the huge investment and product gap yawning behind the scenes, much as British Aerospace did with the whole Rover Group in 1994, flogging off for a five-fold profit what became to be known bitterly as 'The English Patient' by the acquiring BMW afterwards.
@Enl "Not sure what's Daimler's true interest in Aston Martin though"
- I think it's pretty clear that it is the badge, with which Daimler will sell high-end, $150-250k crossovers/SUVs, based on their MLs/GLs/MLCs etc., to go up against the 2016 Bentley Falcon, Lambo Urus, and expected but not yet confirmed Rolls-Royce SUV. The cost of five per cent equity and supplying a few thousand AMG engines at zero or negative margin will quickly be recouped by selling Aston Martin-branded MLs for twice what a ML 63 AMG can command.
@Giannis, Merc1, Amat46, Kowalski, Mr. Mercedes - thanks guys.
@Giannis "So you both think this will be a turning point for Jaguar, ending either bankrupt or under some new parent company?"
- yes, in a word, but more likely under a new parent, having bought the brand names - bit like VW wanted to get the Alfa Romeo brand without the baggage of the existing car range and factories.
@Merc 1 "They will just have to lean on Tata for the money to update and/or design new engines. They won't go out of business IMO. They're on the upswing now and to pull the plug now would just be unthinkable."
- that's the problem, Merc1, Tata (Motors) is in more trouble than JLR behind the scenes. It's a bit like the tail wagging the dog - I mean that it is JLR's current cashflow that is propping up Tata Motors, and not the claimed billions of pounds a year being pumped into JLR by Tata. Without JLR right now Tata Motors would be bust. Tata Motors is being hit by the double whammy of massively increased competition in the Indian passenger vehicle market by the likes of VW and Ford, and the Indian economy itself is a basket case, with shrinking total GDP. Any real profits being made by JLR are going straight into propping up the dire situation of Tata Motors and so of course starving JLR of the funds to do serious, very expensive engine programs, genuinely new vehicle platforms etc., which helps to explain why a company supposedly making over $1 bn a quarter in profits cannot apparently afford to make a separate engine block for its V6 petrol engine.
As to pulling the plug, Tata should have done precisely that by cashing in with an 'IPO', stock market flotation, when the 'JLR Fairytale' was at its zenith, between around early 2012 through to mid 2013, post the Evoque's massive launch fanfare, the massively hyped new 'lightweight' Range Rovers, and before the bubble began to start being pricked with the dawning realisation of how incredibly poor and overpriced the overweight F-type is, and then the pretty much coup de grace currently being delivered by the both excellent Macan and Mercedes GLA, attacking the JLR cash-cow Evoque from above and below respectively. Basically, they missed the boat.
Back in mid 2012 the dreaded 'analysts' and industry 'experts' were pompously declaring JLR could/should be worth as much as $20bn for Tata in an IPO, compared to the $2.5 bn they paid for it in 2008.
I said elsewhere to GCF in 2012 that Tata if they were smart should get rid of JLR through an IPO or even a trade sale for less money, but leave it to some other sucker to deal with the huge investment and product gap yawning behind the scenes, much as British Aerospace did with the whole Rover Group in 1994, flogging off for a five-fold profit what became to be known bitterly as 'The English Patient' by the acquiring BMW afterwards.
@Enl "Not sure what's Daimler's true interest in Aston Martin though"
- I think it's pretty clear that it is the badge, with which Daimler will sell high-end, $150-250k crossovers/SUVs, based on their MLs/GLs/MLCs etc., to go up against the 2016 Bentley Falcon, Lambo Urus, and expected but not yet confirmed Rolls-Royce SUV. The cost of five per cent equity and supplying a few thousand AMG engines at zero or negative margin will quickly be recouped by selling Aston Martin-branded MLs for twice what a ML 63 AMG can command.
EnI
Piston Pioneer
Everybody wants just the brand(s) without the baggage. But usually all comes in the package ... and that makes the package less attractive. Although all the major automotive concerns that offer premium products already have the brands or the products that are same or similar to JLR products. So, there's no real interest in such a brand portfolio at all among the established & known automotive corporations. Therefore JLR ended up in TATA's portfolio and not eg. in the portfolio of Daimler, VAG, BMW, GM, Toyota etc
Same case with AM ... Perhaps a few years ago AM (the brand, not the company) would be an attractive target but today it's redundant to almost all automotive corporations. While as the company it wasn't attractive enough even in the past - therefore Ford sold the AM company to a consortium of private investors. Also the deal breaker back then was the stake in AM Ford refuse to sell (they retained the share to secure the supplying deal to AM - using some Ford parts) - so nobody was really interested in dealing with Ford for another x years.
That's still just a role of a supplier: not only supplying AM the V12 engines but also the GL platform - in exchange for cash; for an agreed price. And the supplying deal only works till the buyer is in a good financial health. And here comes the potential troubles for Daimler. There are absolutely no other synergies for Daimler. And be sure the Lagonda SUVs will make much higher profit than the price for the engine & the platform will be. It's not the same case as Bentley, Lamborghini & Rolls-Royce - since those brands & companies are 100% owned by the supplier (= the parent company). In such case profit margins are much higher than in the case when the buyer is some third company (like in the case of Daimler & AM). OK, Daimler will still get some benefit ... but lower than in the case of eg. Maybach SUV, owned by Daimler itself.
As said: synergies between large car companies are much higher & less risky than the synergies & risk in the case of a collaboration between a large carmaker & a small niche carmaker who has nothing special to offer in exchange (not like Tesla who can offer e-drive tech to its partner). What can AM offer to Daimler? Nothing at all beside cash - until it has it.
IMHO the partnership between AM & Daimler is risky and will cause some headache to Daimler bosses in the foreseeable future. In the end AM can end up in Daimler's hands. But then what? Did Daimler killed Maybach to replaced it with AM / Lagonda? Who knows. Perhaps that's the real rationale behind Daimler's actions. The acquisition can be paid in Daimler shares, and not necessary in cash. I guess the AM shareholder may welcome such deal. We shall see what the future brings ...
ACE
Autobahn Adventurer
Cool story bro.
Remember when you KNEW this collapse was going to happen? http://www.germancarforum.com/community/threads/the-unspoken-collapse.48725/
That time you based your assumptions on sources with very little credibility and they turned out to be completely and utterly wrong. Now you're doing it again. Come back in another years time so that I can say "I told you so" again.
Kilcrohane
Porsche Perfektionist
Here are a few extra points in addition to the six- and eight-cylinder engines issue at JLR, which I think help give more insight for us outsiders into the true situation inside that company.
1. this story cropped up a while back but similar to the engine supply article was not covered or picked up elsewhere in the media:
http://europe.autonews.com/article/...nd-rover-pushes-back-china-production-to-2015
Similar to the enormous and over several years continuous hype in the media surrounding JLR's new engine plant in Wolverhampton UK, the joint venture deal with Chery by JLR for an assembly plant, engine plant and R&D centre garnered massive PR advantage, and cemented the media-driven narrative of a run-away, spectacularly sucessful JLR in the minds of the public.
This article in Automotive News Europe a few weeks ago reported that this JV project would now not start till next year, 2015, a year later than initially expected, even though the project was first mooted in early 2012, and official approval was granted in Nov 2012.
I think one can read between the lines of this apparently innocent announcement - due to 'delays in getting machinery and equipment'(in China, the world's workshop, with 20 VAG car plants?!) - and see a situation where Chery, the JV partner of JLR, now would wish to concentrate its efforts and investment instead in the truly run-away success of its new Qoros brand, rather than JLR, plus the likely cash constraints at JLR with regards to spend on any major projects, due to the hoovering up of cash at JLR by the parent Tata, as explained above.
Since the JV announcement of Chery/JLR in 2012 Qoros has truly taken off. Its new car, the Qoros 3, has received very positive reviews, as China's first truly competent and attractive car, with a Euroncap crash test score even exceeding the likes of the Mercedes A-Class.
It is no real surprise though, as Qoros, ostensibly an Israel-Chinese 50:50 entity, is actually a German(-ic) car and overall project, with the majority of its design and development done or overseen by ex VW group people and Magna of Austria.
The point is, if you were Chery, why would you proceed with a JV partner, one of whose products, the Jaguar XF, can't make 5* crashtest rating after two attempts, yet your new Qoros brand car, costing a fraction, maybe one-fifth the cost of the XF in China, sails through with top-marks 5 stars?
My point is, I think Chery have seen the light and realise they do not need JLR to make it in the global auto industry, plus what might have looked like sure-fire winners for Chery to make on behalf of JLR in early 2012, the likes of the Freelander(LR2) and Jaguar XF, have been massively overtaken in the meantime by the constant new model launches of the Germans, with the likes of the just facelifted BMW X3, made locally in China, and the coming in 2015 for local production Mercedes GLA and new C-Class.
2. The new JLR Wolverhampton engine plant has *still* not begun production, even though it has already been officially 'opened' by the UK's prime minister, and although it is nearly three years since this project, and the associated new 'Hotfire' engines to be built there, were announced.
The first semi-official announcement of this new engine plant and the new engine family 'Hotfire' was made way back in April 2011, formally followed up in Sep. 2011. At the announcement the expected in-service date, i.e. the plant being fully operational, was given as sometime in 2013, with many Evoque owners for instance fully expecting to get their second, replacement orders through with the new JLR 'Hotfire' engines in the 2014 MY model at the latest. 2014 MY came and went, with still the Ford supplied engines.
The very latest information seems to be that the first production engines from Wolverhampton will now not come out until early 2015, and will go into the new baby Jag to begin with, with the possibility that the 2015 MY Evoque and new 2015 Freelander(a long wheelbase Evoque/LR2 essentially) will still soldier on with the Ford engines.
This project must now be the longest new engine plant conception in automotive history, with the likelihood of almost four years from initial, much trumpeted announcement in early 2011, to early 2015, for the 'Job 1' engine.
Compare that to Volvo. Volvo like JLR was sold off by Ford, but over two years after JLR, yet in the three years since it left Ford it has managed to get a brand new, clean-sheet family of 4-cylinder petrol and diesel engines to the marketplace, the 'Drive-E' engines, with what looks like a near if not actual industry-leading combination of power output and fuel economy, i.e. they're pretty damn impressive.
This begs the question: if Volvo could manage to *actually* do what JLR have been seemingly re-announcing every five minutes in the media what they say they are going to do for nearly the last three years and still not having finally done it, and Volvo/Geely is supposed to have far less money than the we are told uber-profitable JLR and its large parent Tata, pumping in a claimed £2.5bn/yr in R&D, then how could JLR not manage it?
Basically, something doesn't add up here.
3. The wider economic picture is now working strongly against JLR, and again, like the large-engines issue, the suspicious delay in the China JV, and the interminable, extremely odd delays in the coming on-line of the new Wolverhampton engine plant, the media are not reporting this.
First there's the appreciation of the British pound against the US dollar. The pound has reached around $1.67, up from $1.50 just a year ago. JLR still relies heavily on US sales, especially at the top, most margin profitable end. A move from $1.50 to $1.67 may not seem much but I guarantee it will be hurting JLR's profits.
Second, we are told constantly by the media that China is where JLR is absolutely booming, even if other regions are soft in demand. But, China overall is cooling off, with moves by the authorities to curb pollution, which affects new car sales and usage, and house price inflation and inflation generally. Also, Daimler has finally woken up in China, getting its act together, and with an already aggressive VW/Audi/Skoda and matching it BMW, the Germans have no intention of leaving JLR alone with their existing relatively small market share.
Third, the oil price in the US is around ten dollars a barrel higher now than a year ago, contrary to the impression often given in the US media of fuel prices having softened over the last year or so. The point being that higher fuel prices encourage the general move away from gas-guzzlers, disadvantaging JLR disproportionately, due to their lack of 'clean diesels' and competitive, downsized six- and four cylinder petrol engines.
4. Evidence on the ground, where eventually all these factors get boiled down to - that of actually moving the metal to real paying customers - is showing, at least in the still key US market, that JLR, Jaguar particularly, is being creamed by the competition, and as a result is almost having to give away product, presumably just to show acceptable YoY artificial rises in reported sales to the media. Take a read of this:
http://www.xfforum.co.uk/threads/25...-to-US-20-000-on-F-type-XJ-up-to-10-000-on-XF
From the above and other corroborating sources it is clear that the Jaguar XJ in particular has been destroyed in the marketplace by the arrival of the new S-Class. It's also pretty clear that none of Jaguar's model range has gained any genuine traction, with even the just launched XFR-S being 'incentivised' already, and the barely year-old F-type being heavily discounted, whereas the Corvette Stingray has a long order backlog.
Okay you'll say, maybe Jaguar's going through a tough spot, but the new F-type coupe is due out, and the new baby Jag will revive fortunes next year. The F-type coupe will do no better than the roadster; worse once the new AMG GT and Maserati's new coupe are shown. The baby Jag looks to already have had its fox shot by the game-changing new C-Class.
A recent YouTube video from of all places Goodwood, the F-type's own backyard so to speak, laid bare just how incredibly poor and overpriced the new F-type really is:
That leaves Land Rover to save the day, right?, but the truth is it is the Evoque which has carried Land Rover over the last nearly three years, and the whole of JLR with it. Now that the Macan is on sale, plus the GLA, and the on-sale in Summer X4, Jeep Cherokee, Lincoln MKC etc., the Evoque's days of selling for up to £50k to impressionable dupes is over, and with it Land Rover.
And that is all why Tata should have got rid back in 2012 when there was perhaps a window of opportunity to do so, because now they are stuck with an operation requiring properly major investment, not just warmed-over aluminium platforms, all dating from the way-back 2003 Jag XJ - for the XK, current XJ, F-type, 'new' Range Rovers, and the 'new' Jag 3-Series fighter XS, even if they do put some silly 'iA' or whatever name on the 'new' platform.
Tata would have to invest now, massively, to the tune of £10 bn plus over the next 3 years, to at least compete in some fashion with the likes of VAG's €50bn over five years etc., or, if they don't, see even the original £2.5bn purchase cost be lost, as there's nothing so worthless as a long-term underinvested-in car company.
I say 'would have to' because as I said before Tata Motors is in a dire situation itself, and the greater Tata group of companies still rely heavily on the Indian market, which is at best stagnating. It isn't going to happen. There is no £2.5bn a year investment, in R&D or otherwise, by Tata in JLR and never has been since they bought it in 2008.
Their best hope is to try to sell the brands, and insist they have some value. But do they really? Jaguar is only really relevant in the West coast, maybe East coast of the US and UK, and looks already to have been outflanked by a reborn Maserati, and shortly will be by Cadillac and maybe even Buick and Lincoln, especially in China.
Land Rover looks more plausible on the face of it, but with Fiat-Chrysler putting some real oomph now behind the Jeep brand worldwide, again especially in China, and the German trio all launching masses and masses of new SUVs in the next few years, plus a 'top end' from Bentley, Lambo, Aston Martin and Rolls-Royce to take on the most profitable Range Rovers, it looks bad for Land Rover too. Conclusion: Tata and JLR are stuffed.
1. this story cropped up a while back but similar to the engine supply article was not covered or picked up elsewhere in the media:
http://europe.autonews.com/article/...nd-rover-pushes-back-china-production-to-2015
Similar to the enormous and over several years continuous hype in the media surrounding JLR's new engine plant in Wolverhampton UK, the joint venture deal with Chery by JLR for an assembly plant, engine plant and R&D centre garnered massive PR advantage, and cemented the media-driven narrative of a run-away, spectacularly sucessful JLR in the minds of the public.
This article in Automotive News Europe a few weeks ago reported that this JV project would now not start till next year, 2015, a year later than initially expected, even though the project was first mooted in early 2012, and official approval was granted in Nov 2012.
I think one can read between the lines of this apparently innocent announcement - due to 'delays in getting machinery and equipment'(in China, the world's workshop, with 20 VAG car plants?!) - and see a situation where Chery, the JV partner of JLR, now would wish to concentrate its efforts and investment instead in the truly run-away success of its new Qoros brand, rather than JLR, plus the likely cash constraints at JLR with regards to spend on any major projects, due to the hoovering up of cash at JLR by the parent Tata, as explained above.
Since the JV announcement of Chery/JLR in 2012 Qoros has truly taken off. Its new car, the Qoros 3, has received very positive reviews, as China's first truly competent and attractive car, with a Euroncap crash test score even exceeding the likes of the Mercedes A-Class.
It is no real surprise though, as Qoros, ostensibly an Israel-Chinese 50:50 entity, is actually a German(-ic) car and overall project, with the majority of its design and development done or overseen by ex VW group people and Magna of Austria.
The point is, if you were Chery, why would you proceed with a JV partner, one of whose products, the Jaguar XF, can't make 5* crashtest rating after two attempts, yet your new Qoros brand car, costing a fraction, maybe one-fifth the cost of the XF in China, sails through with top-marks 5 stars?
My point is, I think Chery have seen the light and realise they do not need JLR to make it in the global auto industry, plus what might have looked like sure-fire winners for Chery to make on behalf of JLR in early 2012, the likes of the Freelander(LR2) and Jaguar XF, have been massively overtaken in the meantime by the constant new model launches of the Germans, with the likes of the just facelifted BMW X3, made locally in China, and the coming in 2015 for local production Mercedes GLA and new C-Class.
2. The new JLR Wolverhampton engine plant has *still* not begun production, even though it has already been officially 'opened' by the UK's prime minister, and although it is nearly three years since this project, and the associated new 'Hotfire' engines to be built there, were announced.
The first semi-official announcement of this new engine plant and the new engine family 'Hotfire' was made way back in April 2011, formally followed up in Sep. 2011. At the announcement the expected in-service date, i.e. the plant being fully operational, was given as sometime in 2013, with many Evoque owners for instance fully expecting to get their second, replacement orders through with the new JLR 'Hotfire' engines in the 2014 MY model at the latest. 2014 MY came and went, with still the Ford supplied engines.
The very latest information seems to be that the first production engines from Wolverhampton will now not come out until early 2015, and will go into the new baby Jag to begin with, with the possibility that the 2015 MY Evoque and new 2015 Freelander(a long wheelbase Evoque/LR2 essentially) will still soldier on with the Ford engines.
This project must now be the longest new engine plant conception in automotive history, with the likelihood of almost four years from initial, much trumpeted announcement in early 2011, to early 2015, for the 'Job 1' engine.
Compare that to Volvo. Volvo like JLR was sold off by Ford, but over two years after JLR, yet in the three years since it left Ford it has managed to get a brand new, clean-sheet family of 4-cylinder petrol and diesel engines to the marketplace, the 'Drive-E' engines, with what looks like a near if not actual industry-leading combination of power output and fuel economy, i.e. they're pretty damn impressive.
This begs the question: if Volvo could manage to *actually* do what JLR have been seemingly re-announcing every five minutes in the media what they say they are going to do for nearly the last three years and still not having finally done it, and Volvo/Geely is supposed to have far less money than the we are told uber-profitable JLR and its large parent Tata, pumping in a claimed £2.5bn/yr in R&D, then how could JLR not manage it?
Basically, something doesn't add up here.
3. The wider economic picture is now working strongly against JLR, and again, like the large-engines issue, the suspicious delay in the China JV, and the interminable, extremely odd delays in the coming on-line of the new Wolverhampton engine plant, the media are not reporting this.
First there's the appreciation of the British pound against the US dollar. The pound has reached around $1.67, up from $1.50 just a year ago. JLR still relies heavily on US sales, especially at the top, most margin profitable end. A move from $1.50 to $1.67 may not seem much but I guarantee it will be hurting JLR's profits.
Second, we are told constantly by the media that China is where JLR is absolutely booming, even if other regions are soft in demand. But, China overall is cooling off, with moves by the authorities to curb pollution, which affects new car sales and usage, and house price inflation and inflation generally. Also, Daimler has finally woken up in China, getting its act together, and with an already aggressive VW/Audi/Skoda and matching it BMW, the Germans have no intention of leaving JLR alone with their existing relatively small market share.
Third, the oil price in the US is around ten dollars a barrel higher now than a year ago, contrary to the impression often given in the US media of fuel prices having softened over the last year or so. The point being that higher fuel prices encourage the general move away from gas-guzzlers, disadvantaging JLR disproportionately, due to their lack of 'clean diesels' and competitive, downsized six- and four cylinder petrol engines.
4. Evidence on the ground, where eventually all these factors get boiled down to - that of actually moving the metal to real paying customers - is showing, at least in the still key US market, that JLR, Jaguar particularly, is being creamed by the competition, and as a result is almost having to give away product, presumably just to show acceptable YoY artificial rises in reported sales to the media. Take a read of this:
http://www.xfforum.co.uk/threads/25...-to-US-20-000-on-F-type-XJ-up-to-10-000-on-XF
From the above and other corroborating sources it is clear that the Jaguar XJ in particular has been destroyed in the marketplace by the arrival of the new S-Class. It's also pretty clear that none of Jaguar's model range has gained any genuine traction, with even the just launched XFR-S being 'incentivised' already, and the barely year-old F-type being heavily discounted, whereas the Corvette Stingray has a long order backlog.
Okay you'll say, maybe Jaguar's going through a tough spot, but the new F-type coupe is due out, and the new baby Jag will revive fortunes next year. The F-type coupe will do no better than the roadster; worse once the new AMG GT and Maserati's new coupe are shown. The baby Jag looks to already have had its fox shot by the game-changing new C-Class.
A recent YouTube video from of all places Goodwood, the F-type's own backyard so to speak, laid bare just how incredibly poor and overpriced the new F-type really is:
That leaves Land Rover to save the day, right?, but the truth is it is the Evoque which has carried Land Rover over the last nearly three years, and the whole of JLR with it. Now that the Macan is on sale, plus the GLA, and the on-sale in Summer X4, Jeep Cherokee, Lincoln MKC etc., the Evoque's days of selling for up to £50k to impressionable dupes is over, and with it Land Rover.
And that is all why Tata should have got rid back in 2012 when there was perhaps a window of opportunity to do so, because now they are stuck with an operation requiring properly major investment, not just warmed-over aluminium platforms, all dating from the way-back 2003 Jag XJ - for the XK, current XJ, F-type, 'new' Range Rovers, and the 'new' Jag 3-Series fighter XS, even if they do put some silly 'iA' or whatever name on the 'new' platform.
Tata would have to invest now, massively, to the tune of £10 bn plus over the next 3 years, to at least compete in some fashion with the likes of VAG's €50bn over five years etc., or, if they don't, see even the original £2.5bn purchase cost be lost, as there's nothing so worthless as a long-term underinvested-in car company.
I say 'would have to' because as I said before Tata Motors is in a dire situation itself, and the greater Tata group of companies still rely heavily on the Indian market, which is at best stagnating. It isn't going to happen. There is no £2.5bn a year investment, in R&D or otherwise, by Tata in JLR and never has been since they bought it in 2008.
Their best hope is to try to sell the brands, and insist they have some value. But do they really? Jaguar is only really relevant in the West coast, maybe East coast of the US and UK, and looks already to have been outflanked by a reborn Maserati, and shortly will be by Cadillac and maybe even Buick and Lincoln, especially in China.
Land Rover looks more plausible on the face of it, but with Fiat-Chrysler putting some real oomph now behind the Jeep brand worldwide, again especially in China, and the German trio all launching masses and masses of new SUVs in the next few years, plus a 'top end' from Bentley, Lambo, Aston Martin and Rolls-Royce to take on the most profitable Range Rovers, it looks bad for Land Rover too. Conclusion: Tata and JLR are stuffed.
mini_cooper4
Autotechnik Ace
Really interesting read! Welcome back @Kilcrohane! It's a pleasure to have you here 
Giannis
Staff member
Very eye opening thread.
So, let's try to sum things up @Kilcrohane and @EnI
Also, if both the XS and the new engines are to arrive next year, assuming no more delays will be announced, and that both will actually be competitive products, isn't this enough for JLR to stay afloat?
So, let's try to sum things up @Kilcrohane and @EnI
- Jaguar is supposed to debut the new 3-series fighter in 2015. It's the same year that the new HotFire engines are supposed to begin production. Am I correct?
- XF and XJ sales are lackluster, if I am not mistaken, but are they close to the targeted numbers?
- JLR's second (if not first) biggest asset is Land-Rover. They have the RR which does and will continue to sell in huge numbers because of its cache, no matter how good or bad it is
- I believe that by now we all have understood what the Evoque is - a good-looking body-shell, over a sub-par chassis. I won't say it's a failure, but its future doesn't seem that bright
- The supposed X3, Q5 and GLA fighter, the LR Freelander isn't a success either
- So, we are left with two brands, both of which undeniably offer fresh and distinctive designs, yet lack in modern engines and performance. The products are not competitive enough
Also, if both the XS and the new engines are to arrive next year, assuming no more delays will be announced, and that both will actually be competitive products, isn't this enough for JLR to stay afloat?
Merc1
Premium
I love reading Kil's post, but Jaguar and Land Rover aren't going out of business. I don't want to argue with him about but he is just hoping they go belly up at this point. Jaguar and Land Rover are on fire relative to just a few years ago. NO way they're going to just say, oh we don't have the engines, lets withdraw from all the markets around the world. The Range Rover is nearly a brand itself and priceless no matter what our friend here says. They'll do something but going out of business won't be it. My hunch is that they've already starting the process of making their current engines compliant. I just read an article about the Billions being invested into JLR so you'd figure modern engines are part of the plan.
M
M
EnI
Piston Pioneer
@Giannis
It's not about product portfolio it's all about R&D costs! And those are extremely high these days due to dynamic process in the field of safety & environment regulation ... And due to technically more advanced rivals you have to be on par with to be competitive. And here small companies have BIG problems - since they have a product portfolio diverse enough at least 3 or 4 different engines are required, at least 2 or 3 different gearboxes, at least 2 different (modular) platforms etc. That requires A LOT R&D money if the company has to develop all those parts alone. Or it has to find a tech partner who will supply them all the needed parts - and in the case of engines & platforms that can only be a car maker company.
Sure JLR & AM etc (don't forget VOLVO here ... they are in the same situation!!!) have great plans regarding the future products (new ones & refreshed ones) but do they have enough money to develop them completely on their own? I don't think so. Revenues of AM, JLR, Volvo are just too small to finance such huge R&D projects on their own. Therefore tech partners are needed - either as suppliers or R&D partners (R&D collaboration).
C'mon ... Even car makers like Daimler / MB & BMW are partnering with other (larger) car makers (Renault-Nissan & Toyota) to lower the R&D costs due to various synergies. VAG is big & diverse enough to do it on their own ... And their modular approach is starting to pay off - and they have a bit of an advantage since they were the first ones with modular platforms. So, don't be surprised if/when MB FWD vehicles and BMW/MINI FWD vehicles start to share (co-developed) modular platforms with Renault-Nissan & Toyota in the future. The possible synergies due to lower R&D costs per company & due to economies of scale are just to tempting not to engage in such partnerships. Eg. the mini MINI (aka Rocketman) can be put on the next "UKL 0" platform co-developed with Toyota (Aygo) and PSA (108, C1) ... rivaling VW's Up!, Skoda's Citigo, upcoming Audi Urban, Renault Twingo / smart 4four, Opel Adam, Fiat 500 etc
OK, not only JLR, AM & Volvo are in trouble here. IMHO Alfa Romeo - especially if/when going RWD platform - will be in huge troubles too. I can imagine a modular platform shared with Chrysler 300 & the Maserati cars ... But still - considering the combined sales numbers of all the RWD cars sharing that platform & the price segments they represent - the platform still isn't a true high-volume platform to be as profitable as eg. BMW's or MB's modular RWD platforms. Yet it will sure be more profitable than today. But not enough to compete with BMW, MB, even Lexus. Lexus ... I wonder how much profit Toyota makes with RWD Lexus platform - sure there are some savings due to Toyota's size (and purchasing power) yet still the R&D costs are high enough to not allow profit margins as seen @ BMW, MB etc.
It will be interesting to monitor the development of JLR, AM, Volvo etc situation. The automotive industry is ruthless these days. R&D costs are ENORMOUS. Not only the mechanical parts are the reason, but also the electronic ones: since a car is becoming more & more a mobile device on wheels. So, partnerships & even mergers in the automotive industry are inevitable. Not only that ... I can also see strategic alliances, partnerships & even capital ventures between car makers & IT companies. And in such environment only the toughest ones will survive ... and quite some (especially the niche) brands & companies will die off ... including some brands within big automotive corporations.
It's not about product portfolio it's all about R&D costs! And those are extremely high these days due to dynamic process in the field of safety & environment regulation ... And due to technically more advanced rivals you have to be on par with to be competitive. And here small companies have BIG problems - since they have a product portfolio diverse enough at least 3 or 4 different engines are required, at least 2 or 3 different gearboxes, at least 2 different (modular) platforms etc. That requires A LOT R&D money if the company has to develop all those parts alone. Or it has to find a tech partner who will supply them all the needed parts - and in the case of engines & platforms that can only be a car maker company.
Sure JLR & AM etc (don't forget VOLVO here ... they are in the same situation!!!) have great plans regarding the future products (new ones & refreshed ones) but do they have enough money to develop them completely on their own? I don't think so. Revenues of AM, JLR, Volvo are just too small to finance such huge R&D projects on their own. Therefore tech partners are needed - either as suppliers or R&D partners (R&D collaboration).
C'mon ... Even car makers like Daimler / MB & BMW are partnering with other (larger) car makers (Renault-Nissan & Toyota) to lower the R&D costs due to various synergies. VAG is big & diverse enough to do it on their own ... And their modular approach is starting to pay off - and they have a bit of an advantage since they were the first ones with modular platforms. So, don't be surprised if/when MB FWD vehicles and BMW/MINI FWD vehicles start to share (co-developed) modular platforms with Renault-Nissan & Toyota in the future. The possible synergies due to lower R&D costs per company & due to economies of scale are just to tempting not to engage in such partnerships. Eg. the mini MINI (aka Rocketman) can be put on the next "UKL 0" platform co-developed with Toyota (Aygo) and PSA (108, C1) ... rivaling VW's Up!, Skoda's Citigo, upcoming Audi Urban, Renault Twingo / smart 4four, Opel Adam, Fiat 500 etc
OK, not only JLR, AM & Volvo are in trouble here. IMHO Alfa Romeo - especially if/when going RWD platform - will be in huge troubles too. I can imagine a modular platform shared with Chrysler 300 & the Maserati cars ... But still - considering the combined sales numbers of all the RWD cars sharing that platform & the price segments they represent - the platform still isn't a true high-volume platform to be as profitable as eg. BMW's or MB's modular RWD platforms. Yet it will sure be more profitable than today. But not enough to compete with BMW, MB, even Lexus. Lexus ... I wonder how much profit Toyota makes with RWD Lexus platform - sure there are some savings due to Toyota's size (and purchasing power) yet still the R&D costs are high enough to not allow profit margins as seen @ BMW, MB etc.
It will be interesting to monitor the development of JLR, AM, Volvo etc situation. The automotive industry is ruthless these days. R&D costs are ENORMOUS. Not only the mechanical parts are the reason, but also the electronic ones: since a car is becoming more & more a mobile device on wheels. So, partnerships & even mergers in the automotive industry are inevitable. Not only that ... I can also see strategic alliances, partnerships & even capital ventures between car makers & IT companies. And in such environment only the toughest ones will survive ... and quite some (especially the niche) brands & companies will die off ... including some brands within big automotive corporations.
klier
Premium
Hell no!
Kilcrohane
Porsche Perfektionist
I'll reply to the latest comments above either later today or over the weekend.
One extra quick-ish point though:
Remember I said 'the wider economic picture is now working strongly against JLR', well, two pieces of news just this morning further compound this exchange rate-based problem for JLR.
1. 'pressure builds for US to devalue dollar further, to make US exports more competitive and imports dearer, to create millions of US jobs'
http://www.latimes.com/business/mon...rt-says-20140226,0,655582.story#ixzz2uS9LyPaY
the last thing JLR needs right now is a further appreciation of the pound against the dollar, with the pound already having risen around 10% in the last 12 months. Driving the pound up to nearer £1=$2 would destroy what's left of JLR's US sales, forcing them to raise prices substantially. It was precisely this problem that did for Sir John Egan's Jaguar Cars back in 1988, and drove Jaguar into the hands of a gullible Ford, who just wanted to outdo GM, a year later.
2. Hard on the heels of the pound's rise against the US dollar, as a result of a deliberate policy to devalue the currency by the Chinese authorities, the pound is now trading at a two and a half year high against the Yuan, and has risen by 15% alone since July 2013.
http://www.xe.com/currencycharts/?from=GBP&to=CNY&view=5Y
Like the situation in the US this will eat majorly into JLR's profits in China, upon which it is of course increasingly reliant overall, as real sales in the US and Europe fall away due to the much better competition.
And like the US market, JLR, unlike its German competitors, has none or only very little local production(CKD) to offset the effects of the devaluing local currency. This makes the story of the one year delay in the JV project with Chery for substantial local vehicle assembly and engine production in China mentioned above, all the more significant and damaging to JLR.
In sum, all JLR's chickens are coming home to roost at once.
Having lived for so long on a fully media-assisted barrage of propaganda, the latest exposés of just how in-reality incredibly poor and hugely overpriced JLR's sole cash-cow, the Evoque, actually is, when put up against a proper car from a proper company, like the Macan, not to say dangerous, as Consumer Reports, bless them, have finally had the 'breaking-ranks' bottle to say - the Evoque was dangerous from day 1, but was cynically and appallingly covered up for by a largely corrupt media - plus the once positively assisting background economic situation has moved completely against them, and as Consumer Reports might say the Emperor suddenly has no clothes, rather than the new gold-threaded suit, the corrupt media claimed so long and so hard it had.
One extra quick-ish point though:
Remember I said 'the wider economic picture is now working strongly against JLR', well, two pieces of news just this morning further compound this exchange rate-based problem for JLR.
1. 'pressure builds for US to devalue dollar further, to make US exports more competitive and imports dearer, to create millions of US jobs'
http://www.latimes.com/business/mon...rt-says-20140226,0,655582.story#ixzz2uS9LyPaY
the last thing JLR needs right now is a further appreciation of the pound against the dollar, with the pound already having risen around 10% in the last 12 months. Driving the pound up to nearer £1=$2 would destroy what's left of JLR's US sales, forcing them to raise prices substantially. It was precisely this problem that did for Sir John Egan's Jaguar Cars back in 1988, and drove Jaguar into the hands of a gullible Ford, who just wanted to outdo GM, a year later.
2. Hard on the heels of the pound's rise against the US dollar, as a result of a deliberate policy to devalue the currency by the Chinese authorities, the pound is now trading at a two and a half year high against the Yuan, and has risen by 15% alone since July 2013.
http://www.xe.com/currencycharts/?from=GBP&to=CNY&view=5Y
Like the situation in the US this will eat majorly into JLR's profits in China, upon which it is of course increasingly reliant overall, as real sales in the US and Europe fall away due to the much better competition.
And like the US market, JLR, unlike its German competitors, has none or only very little local production(CKD) to offset the effects of the devaluing local currency. This makes the story of the one year delay in the JV project with Chery for substantial local vehicle assembly and engine production in China mentioned above, all the more significant and damaging to JLR.
In sum, all JLR's chickens are coming home to roost at once.
Having lived for so long on a fully media-assisted barrage of propaganda, the latest exposés of just how in-reality incredibly poor and hugely overpriced JLR's sole cash-cow, the Evoque, actually is, when put up against a proper car from a proper company, like the Macan, not to say dangerous, as Consumer Reports, bless them, have finally had the 'breaking-ranks' bottle to say - the Evoque was dangerous from day 1, but was cynically and appallingly covered up for by a largely corrupt media - plus the once positively assisting background economic situation has moved completely against them, and as Consumer Reports might say the Emperor suddenly has no clothes, rather than the new gold-threaded suit, the corrupt media claimed so long and so hard it had.
SCOTT27
Drift Dynamo
The big question is how will the Range Rover react when some of the the more luxurious SUV competitors arrive from Bentley and Rolls-Royce , Maserati , BMW and Mercedes-Benz to do battle. If you consider the Bentley and Rolls-Royce that will probably cost twice more than the Range Rover.
Maserati is interesting because I drove a Ghibli this past week and it was superb , the SUV Concept was interesting will be interesting to see that in production form. I remember at the IAA in 2011 at its premiere , VAG measuring the concept against an imaginary VAG proposal which could be the Bentley or the next Cayenne. Having touched down at Geneva I have seen some interesting new models piled up to drive into the halls or indeed being worked on at their respective booths an interesting Maserati Ghibli type Coupe Concept. And to think a few years back I turned down a job offer from Maserati.
Maserati is interesting because I drove a Ghibli this past week and it was superb , the SUV Concept was interesting will be interesting to see that in production form. I remember at the IAA in 2011 at its premiere , VAG measuring the concept against an imaginary VAG proposal which could be the Bentley or the next Cayenne. Having touched down at Geneva I have seen some interesting new models piled up to drive into the halls or indeed being worked on at their respective booths an interesting Maserati Ghibli type Coupe Concept. And to think a few years back I turned down a job offer from Maserati.
SCOTT27
Drift Dynamo
Industry rumours suggest the G-Force concept was a look at suggesting a Range Rover rival above the GL.
The GL is in reality an extended ML. You know further expansion makes sense.
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