Jaguar hosted our first class of master’s degree students from Rochester Institute of Technology’s product development program this past July in Coventry, England. We visited the engineering center and were elighted by what we saw. Jaguar had just had its best sales month yet (June, 2000) and the S-type sedan has become the niche brand’s best seller, doubling the size of the company, accounting for nearly 9,000 of the 14,650 Jaguars sold in the first four months of 2000.
When Ford Motor Company first purchased Jaguar over 10 years ago, there were more than just raised eyebrows in the auto industry and investment community. Could the company be saved? Was it worth it? Quality has since steadily improved at Jaguar and is on a convergent course with Lexus and other market leaders. Jaguar has successfully positioned itself among the giants of the luxury segment, and distinguished itself from Mercedes and BMW with distinctive style, agile handing, and effortless ride. One would have to say that at this juncture the Ford purchase of Jaguar has paid off.
In addition to the S-type, the new Jaguar platform X400 will be in showrooms in early 2001 and attacks the popular BMW 3-series market niche. Prices will start in the low $30’s. We saw the platform being tested in a demonstration, and we were all amazed that a luxury car could be developed off of the Mondeo platform.
Perhaps the most striking thing observed on our tour is the humming activity in this beehive of development engineering at Jaguar. Everywhere we looked were teams of two or three engineers hard at focused tasks. Tour or no tour, people are getting the work done. Ford procedures manuals were everywhere on desks, yet Jaguar maintains its independence, fiercely. Even more surprising are Jaguar’s plans to expand the engineering facility. Even if one excludes the new stand-alone design center, Coventry engineering will soon be significantly larger than it has been up until this point.
The continuing challenge at Jaguar, like at so many other car companies, is getting the delicate balance of continuous change and maintenance of a powerful brand image which leverages past glory. All companies have a defensive streak that defends the past. Jaguar is no different. Research and facts have to drive the change process. If the customer wants it, a company has to find a way to do it, cost effectively. Market segments have to drive every business model for programs. The early, big decisions are risky, of course.
In the U.S., Jaguar has a dealer density challenge. In many areas of the U.S., where Jaguar is demanded by customers, the nearest dealer may be hundreds of miles away. This makes customer relationship management (CRM) difficult, but Jaguar is working on that. But Jaguar leverages one of the key differences between successful and unsuccessful companies: high job satisfaction and loyalty among company employees are directly and significantly related to customer satisfaction and loyalty.
As for the future at Jaguar, three things seem likely based on off-line conversations with our amiable hosts. First, Land Rover is the most recent addition to the Ford Premier Automotive Group, and it is only 20 miles away from the Coventry Engineering Center. Collaboration seems natural. Second, Jaguar sees great opportunities in sourcing technology in Germany. Third, and finally, with respect to the all-important styling challenge of the luxury segment, Jaguar and people in its new design center intend to look outside the auto industry for inspiration. The major question for the corporation, of course, is to what extent Jaguar can help relieve the problems of other Ford platforms in Europe. Ford operating profit dropped from $206-million a year ago to $156 million.