To the surprise of few in the industry, England’s Jaguar Cars is to establish a wholly owned subsidiary in Australia, writes Peter McKay.

This was described in Friday’s announcement as a ‘mutually agreed decision’ between the current importer, the UK-controlled Inchcape Motors Australia (IMA), and Jaguar Cars.

Jaguar confirmed that it has been working with Inchcape towards this outcome for some time.

In what appeared to be a predictable show of solidarity and continuing faith in the brand, Inchcape said it would retain an interest in the Jaguar brand through its growing retail network.

Jaguar has had to fight hard to keep sales above 1000 over the last two years

Inchcape retains distribution of Subaru, a very successful and profitable brand for the company in Australia, and Peugeot. It has held the Jaguar franchise for 10 years.

The Jaguar importer’s move to parental control, to come into effect on June 1 this year and follows similar recent moves by Volkswagen and Suzuki to operate their own franchises in the tough Australian market. Audi is also believed to be about to take a share of control of its own distribution from current importer Astre.

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Though Jaguar, under Ford stewardship, has bounced back commendably from the bad old days, luxury car buyers in Australia have long, long memories.

While there is much residual affection for the English brand Down Under, the majority of car-purchasing decisions are made from the head rather than the heart.

The reality is that Mercedes-Benz, BMW and Lexus (and to a lesser extent, Audi) offer the probability of higher resale and residual values than Jaguar, and this is often enough to pull a buyer towards the German and Japanese products.

With the dreaded ‘recession’ word being spoken by local economists over the last few days following a record low for the Australian dollar and a drop in interest rates, the fear is that consumer confidence may slip. Luxury cars are often the first to be affected.

BMW outsold Jaguar by nine to one last year

The British marque has had to fight hard to keep Australian sales above 1000 over the last two years.

It sold just 74 cars in the first two months of 2001.

BMW, the luxury car segment leader in Australia, outsold Jaguar nine to one last year, suggesting the English luxury car maker will find it hard at least until the small X-type hits the showrooms.

Jaguar is also feeling the lack of a luxury four-wheel-drive off-roader. The Lexus LX470, Audi All-road, BMW X5 and Mercedes-Benz M-class) are all making a big dent in traditional top-drawer passenger car demand.

But Jaguar Cars has shown confidence in Jaguar Australia’s managing director, Danny Rezek and finance manager, Andrew Moore, both of whom have been retained initially to establish the new company in Australia ready for the June 1 start-up.

Rezek will also be responsible for the ongoing management of the current Jaguar business in the interim.

In fact all staff at Jaguar Australia have been invited to join the new company, changing employer on June1.

AUSTRALIAN LUXURY PASSENGER CAR SALES

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