It’s the car that created what must surely be the most profitable vehicle segment since the original Range Rover. Now, as the Evoque reaches mid-cycle, how can Land Rover make sure it continues to be JLR’s profits powerhouse?
It’s worth stepping back and recalling just what the C-premium SUV/crossover segment looked like before 2011. Sure there had been some players in it but none had made a major impact on sales of larger or smaller conventional cars. The Mercedes-Benz GLK-Class was held back by its lack of right-hand drive (Daimler quickly came to regret this as the segment began to boom in the UK) but the Audi Q5 was doing useful numbers in Europe, if not North America. Infiniti and Acura had minor rivals, Jeep didn’t, and the BMW X3, like the Benz GLK, was hampered by so-so-styling. The Lexus RX was and still is a major success, having found a sweet spot sized betwixt the Audi Q5 and Q7 – half a class up from the Golf-sized Evoque. As for the Cadillac SRX, it did well in the US and Canada but not anywhere else, while the Volvo XC60 was then gaining ground but still only a modest success.
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One of the fascinating things about the Evoque is that it was never meant to be a Range Rover. A change of thinking saw the project shifted away from the original idea of a 4×4 mainstream model below the Discovery. When the prototype turned up at the Detroit show in January 2008, many dismissed this attractive convertible SUV concept as a flight of fancy. Hadn’t Suzuki tried and failed with the X90, an earlier open-topped 4×4? Ah yes, but Land Rover had other plans for its LRX design study.
As we well know, the LRX never made it to production but come early 2016 – fully eight years after the debut of the concept – it will. What does that say about just how right the styling remains? The Cabriolet will be revealed in the coming months, probably at either the Goodwood Festival of Speed or the Pebble Beach Concours, with production scheduled to commence in January. Naturally it will have the new front and rear ends of the MY2016 Coupé and five-door.
The Cabrio won’t add much volume but what it will do, is draw attention to the littlest Range Rover as the two other body styles enter their last three years of production. The previous shape L322 Range Rover and L320 Sport were selling at record numbers in their last year of manufacture, so the smart money is on the same thing happening with the first generation L538. The car remains almost ridiculously popular and that’s despite the impact made by the Porsche Macan, BMW X3 & X4, and the now aged but still competitive Q5. The rapidly rising success of the Lexus NX in the US, China and even, despite the lack of any diesel engine, the UK, further demonstrates that the segment seemingly has a lot more expansion potential to come.
Another selection of mid- to large-sized markets is proving to be full of further opportunity for Land Rover: countries such as Australia (Evoque sales surged by 99% YoY to 739 in Q1), Canada, India, Mexico, Brazil, and even Germany, where the brand’s sales have reached 4,333 units for the year to date, with 1,606 of those the Evoque. How does that compare to the Macan in its home market? Porsche’s compact SUV had total sales of 2,088 in the first quarter (and 1,650 for the larger Cayenne versus 1,132 for the Range Rover Sport and 767 for the Range Rover). Who says Germans won’t buy English cars? Mini has been proving that incorrect for many years, but sadly Jaguar’s performance just goes from bad to worse: sales of the XF, Jaguar Deutschland’s best seller, collapsed by 38% in Q1 to just 588 cars, with brand registrations crashing by 30% to a mere 962 units during the same period.
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By GlobalDataJaguar has this month finally begun to receive the products it has needed for years, with production of the XE saloon having just commenced, to be followed by the second generation XF saloon and the F-PACE crossover between now and early 2016. These cars cannot come soon enough. The menacingly handsome but too-pricey and diesel-less F-TYPE is a rare sight even in Britain, and just 333 were sold in Germany during Q1. Likewise the soon to be facelifted XJ: only 39 units were registered there in the same period. Sales of the VW Phaeton, a car that will soon be thirteen years old, were nine times that number (352), while the equivalent tally for the Mercedes-Benz S-Class was 1,848.
After the F-PACE is established, yet another additional JLR vehicle will appear and this one could have an impact on the Evoque which some might be surprised by. Project L560 will be marketed as the Range Rover something (‘Stormer’ is one possibility, that name having once been used for an unrelated concept) and sized similarly to the F-PACE, i.e. between the Evoque and the RR Sport. Just as the smaller model begins to enter the final phase of its production cycle (L551, the successor, is due in 2018, and the Sport’s facelift is due between 3 and 4 years ahead of its L461 replacement in 2020) will come a model that’s about the same size as the Lexus RX.
Let’s look at how the smallest Range Rover has been doing worldwide. Retail sales for 2014 were 125,364, a tiny dip compared to the previous record years, while in Q1, there was a further slight fall to 31,055. The market knew that an updated model was coming and with the big month of March in Britain where the registration plate number changed to 15, that had quite an impact.
Come September and the arrival of the 65 plate, Evoque sales should be surging once more. That’s when production of the model year 2016 cars will be ramping up, with the new low-CO2 Ingenium engine sure to be as big an attraction as the exterior and interior makeovers. We might not see a new record set in 2015 but as long as the local market remains strong throughout 2016, and the US and China too, somewhere between 115,000 and 145,000 is surely possible. Maybe even more, given the potential of China – sales of the locally made five-door continue to gather pace.
Analysts talk about the sky-high returns from the Range Rover, and rightly so, when a majority of cars are pushing six figures in the UK and US, with Chinese market prices higher still due to taxes. What can sometimes be lesser realised is the impact the Evoque has on JLR’s bottom line. The facelifted range is to be priced from GBP30,200 but the new Autobiography is a GBP50,000+ car. It also doesn’t take a genius to work out that the SVAutobiography model grade which has just been added to the top of the Sport’s line up will surely become available for its little brother. That seems likely for model year 2017. Those thirty to fifty-plus grand pricing levels will help to position the L560 (the F-PACE’s twin-under-the-skin), meaning even if some Evoque prospects decide to go for the larger and one suspects, GBP40,000-70,000 car, JLR will be quids in either way.
Daimler has belatedly realised what a trump card it had never played with the heritage of the G-Class – witness the renaming of its SUVs and crossovers into the GLC, GLE, GLE Coupé and GLS Classes, joining the GLA, with a GLB and a GLC Coupé to come. It’s fair to say that even with the original having been in production for almost 36 years, the G name isn’t that well known, as there are so few of them on the road. Not so for the now four generations of ever larger and more luxurious Range Rovers – even in China (OK, the larger cities) where the older models are rare, people know what one looks like and that it’s very highly priced.
Apart from a name, the Evoque has nothing in common with either the current or any previous Range Rover. Yet those two words are exactly why JLR will continue to lead all rivals in the prices commanded by its RR model ranges, including Mercedes-Benz. Industry executives are sometimes lampooned for the decisions they take to create additional models, the Acura ZDX, Cadillac BLS & ELR, BMW 5 GT and Opel Ampera being notable examples of cars that failed, but whoever came up with the idea to create the Evoque was clearly inspired. With the addition of the L851 ‘Junior’ in 2019 or 2020, JLR should by decade end have in Range Rover one of the world’s most valuable automotive brands. All thanks to some clever thinking, branding, and engineering.
