Ford’s luxury standard-bearer Jaguar, losing money and failing to hit its sales targets, has high hopes for its delayed new XJ aluminium bodied top-of-the-range car when it finally arrives on the market in April. But the timing could be unfortunate, writes Neil Winton.
Fears that war may soon erupt in the Middle East has undermined prospects for economic growth and shaken consumer confidence. Difficulties with manufacturing the car in aluminium delayed the launch from late 2002. The lack of a diesel powered XJ will be a major drawback to sales in Europe. And the performance of the brand against competitors like BMW and Mercedes leaves analysts believing that Jaguar still has a long way to go, at least as far as the X and S-type models are concerned. The new XJ though is seen as a major step in the right direction for Jaguar.
Shortly after the XJ was unveiled at the Paris Car Show last September, Ford President and Chief Operating Officer Nick Scheele let slip that Jaguar would lose about $500 million (€463 million) in 2002 as its little X-type failed to meet ambitious sales targets, and because complications in meeting quality standards in aluminium manufacturing delayed the XJ launch.
Scheele was later publicly rebuked by Ford Chief Executive Officer William Clay Ford Jr for his indiscretion.
Sales target 30,000 to 35,000
Jaguar managing director Mike Beasley, in an interview at the launch in Spain, said XJ sales should eventually hit between 30,000 and 35,000 annually, around the level achieved by its predecessor. Beasley acclaimed the technical achievement embodied in the all aluminium XJ range. Use of an aluminium body allowed Jaguar to satisfy customer demand for better performance, more space, and more gadgets, at a time when government pressure was increasing fuel costs and taxation.
Beasley declined to specify the added cost of providing am aluminium body, but said it wasn’t significantly more than traditional steel. But analysts question the importance to potential customers of the lightweight aluminium construction, and criticise Jaguar for failing, again, to come to the market with a diesel. About 50 per cent of class leading Mercedes S models are diesel powered.
X-Type diesel in 2003
Jaguar also failed to launch its X-type with a diesel, at a time when Europeans were falling in love with oil-burners. Jaguar said that this year it would finally be able to provide the X-type with a diesel. Beasley wouldn’t say when the XJ might be diesel powered, but said that because of the huge savings in weight generated by the use of aluminium in the XJ, buyers in Britain at least would find that tax bills, which reflected CO2 output, would be on a par with diesels.
‘On the high side’
Al Bedwell, auto analyst with J.D.Power-LMC Automotive Forecasting Services, believes Beasley’s projections are on the high side, expecting XJ sales to peak at around 29,000 units per annum. Bedwell also said Jaguar’s efforts to match the competition led by Germany’s BMW and Mercedes Benz, had been a disappointment.
The X-type had failed to disturb the supremacy of the BMW 3-series in the compact executive sector. Its styling hadn’t caught the imagination of buyers, according to Bedwell, as sales stalled. Last year, Jaguar sold about 73,600 X-types, its first full year on sale, Automotive News Europe figures show.
This year sales are likely to fall to about 60,000, according to CSM Forecasting, compared with Jaguar’s over-ambitious target of 100,000 X-types a year, announced at the launch in 2001. The Halewood, England, plant which makes the X-type has the capacity to build 125,000 cars a year, and this has led to speculation that plant closures might have to be faced. Jaguar also builds cars at plants in Browns Lane and Castle Bromwich in the Midlands.
“Unless there is some miracle with the X-type, Jaguar might have to close a plant. They’ve just spent a lot of money revamping Halewood, so I assume they are looking at Browns Lane and Castle Bromwich,” Bedwell said. In 2001, Jaguar also reckoned its overall sales would hit 200,000 by mid-decade.
But J.D.Power-LMC projects sales – of mainly X-types, S-types and XJs – will reach only about 140,000 in 2003 and 2004, and maybe 170,000 by 2008. Jaguar’s Beasley turned aside questions about plant closures, saying this wasn’t in any business plan he’d seen. “We plan steady, solid, step-by-step growth for Jaguar,” Beasley said.
Ford will benefit
The knowledge gained from using aluminium to build the XJ would allow Jaguar to benefit manufacturing across the Ford empire.
“We’ve learned an awful lot (about working with aluminium) with the XJ, and this will go into the corporate learning bank. Ford as a whole will be looking at the plus points,” Beasley said. Currently, only Audi, with its range topping A8, and small A2, uses aluminium construction for mass-produced cars.
The all-new XJ has retained the looks of the traditional Jaguar range-topper, but incorporates radical new aluminium construction, which has slashed around 200 kilograms of weight compared with the previous cars.
Jaguar has used aerospace industry techniques, using rivet bonding and adhesives to make the monocoque body. The new XJ is 40 per cent lighter than the old one and 60 per cent stiffer. “Many of the new manufacturing techniques used in XJ construction were honed by the aerospace industry. Instead of the conventional spot welding used on a steel body structure, the new Jaguar XJ uses structural adhesives and rivets to assemble the unibody structure of aluminium pressings, extrusions and castings which form the foundation of the vehicle,” Jaguar said.
The Jaguar public relations department doesn’t hold back in its praise for the new car. “The result of the lightweight vehicle architecture, and the application of numerous other advanced technologies, is that this all-new XJ delivers outstanding performance, economy, emissions and safety while retaining the dynamic agility and spirit for which Jaguar is renowned.”
Journalists driving the new car on the relatively empty roads here in southern Spain were impressed with its abilities, saying that handling, driveability, and technology at least matched the opposition, as did the luxury appointments inside and the build quality. An old Jaguar bugaboo – lack of space in the rear, and limited boot capacity – had been addressed by the new design.
The base XJ is powered by a 3.0 litre 240 bhp V6 engine, priced at £39,000 (€56,940). Jaguar expects this version will account for about 50 per cent of sales when it appears on European forecourts this spring. The base version includes leather seats, electric powered seats and pedals, six-speed automatic gearbox, cruise control, radar reversing, self-levelling air suspension, and various computerised devices to enhance safety.
According to Jaguar, this solidly undercuts the competition which it reckons is the BMW 735 i at £52,750, the Mercedes S280 at £44,410, the Audi 3.7 Quattro (£51,050) and Lexus LS430 (£54,500).
The Jaguar range is completed by a 3.5 litre 262 bhp V8, a 4.2 litre 300 bhp V8, and a 4.2 litre supercharged V8 producing 400 bhp.
Uphill struggle ahead
J.D.Power-LMC’s Bedwell believes that Jaguar faces an uphill struggle against its mainly German rivals and is paying for some design missteps.
“They didn’t get the design right with the S-type and the same with the X-type which missed out in sporting appeal compared with cars like the BMW 3-series,” Bedwell said. “Jaguar is struggling really; it’s not going to make its targets for the X-type. It’s a great brand but they’ve not made the most of it. The F-type (roadster) has been put on ice, but probably will appear in 2007/8, that will help. The redesign of the S-type in 2006 will help.”
“The design of new products hasn’t caught the imagination, and they’ve failed to provide the right engines. The trouble is, their cars are not quite as desirable as the Germans’,” Bedwell said.