By auto industry standards, three vehicle assembly plants is at least one too many for a company the size of Jaguar Land Rover. The conventional wisdom is that 200,000 is a minimum annual production for a single plant and, by 2010, JLR had never reached more than 300,000 from three.
It was clear to Carl-Peter Forster [then group chief executive officer of Tata Motors and chairman of JLR] - who had experience of UK car factories in a previous role as manufacturing director of BMW and Rover - that JLR would be better off with just two manufacturing locations. This issue had been simmering since the previous September and was a serious bone of contention with the unions, who had still not come to an agreement with the company over pay and conditions. …
Logically, that one plant would be in the Midlands - either Castle Bromwich or Solihull, which are just 10 miles (16 km) apart - and the betting was on the former, as Solihull needed modernisation and sits on more valuable land. Halewood, on Merseyside, 120 miles (190 km) further north, would continue to build the smaller and more conventional models.
The plant closure issue was still on the table when Forster talked to journalists at the Paris Motor Show in October. He claimed his motives were misunderstood, that the ambition was to produce more vehicles and employ more people in the UK, and that there was no intention to reduce JLR's total direct workforce of 16,000. The move should be seen not as closing a factory but as a merger, creating one larger plant from two. …
Just two weeks later, JLR announced that it would keep all three factories open.…
Some outsiders saw the retention of both Midlands factories as a missed opportunity for rationalisation and cost-saving…It was clear that, in the changed economic climate, continuing with three plants would only be viable as part of a seriously ambitious expansion plan.
By the autumn of 2010, JLR was seeing strong sales growth and the full-year figures would show combined sales of Jaguar and Land Rover at 232,839, up 19 per cent on 2009. But now equalling its previous best of 300,000 cars a year would not be enough: JLR would have to go way beyond that. At that time, not many observers gave it much chance of reaching 400,000; however, within two years that figure would look entirely possible, and 500,000 within reach.
The most significant sales increases in 2010 were in the UK (64 per cent), the United States (24 per cent) and China, where the JLR figures were double those of the previous year….
Jaguar and Land Rover had only been in China (selling through four separate importers) since 2004 and wouldn't set up its own sales company in Shanghai until August 2011. JLR's rivals had been making cars there for some time. Audi, part of the Volkswagen Group, was firmly established as the leading premium brand, supplying official cars to the Chinese government as well as to the country's burgeoning industries (most of which are government-controlled). As the majority of the more expensive cars are chauffeur-driven, Audi, BMW and Cadillac made specially lengthened models in China to provide more rear-seat leg room….
The new Jaguar XJ was the first JLR car designed with China in mind. The poor response of traditional markets to the previous XJ had prompted the complete and dramatic change of style but the extra chrome fittings, inside and out, were added to meet the tastes of clientele in the world's fastest-growing market….
The publicity blurb declared that, with the XJ launch, 'the Jaguar renaissance is complete'. Design chief Ian Callum said that this car, rather than the XF, established the new look for the marque. Its long, low, swept-back shape and aggressive (Callum prefers 'assertive') gaping mouth were more extreme, and more distinctive, than the XF. The XJ was resolutely modern, confident; perhaps even a bit flash. The dwindling number of traditional Jaguar enthusiasts would probably hate it but that was the point: it was designed to appeal to buyers who would never previously have considered a Jaguar….
With all its new products out in the market, Jaguar kept the publicity machine running with a surprise exhibit at the autumn motor shows in Paris and Los Angeles. The C-X75, so named to celebrate 75 years of Jaguar design (going back to the 1935 SS) was a flight of fancy that also made a statement about Jaguar's commitment to technological innovation.
Ian Callum and Julian Thompson, the head of Jaguar's advanced design studio, had produced a truly beautiful super-sports car that looked fit to rival the Bugatti Veyron or Ferrari Enzo but boasted a hybrid powertrain with four electric motors and two tiny gas turbines as electricity generators….
The covers of motoring magazines screamed: 'We drive the world's first jet-powered supercar' and 'The Jaguar that can out-drag a Veyron', and their stories were peppered with tantalising statistics: 780 horsepower, maximum speed 205 mph (330 km/h), acceleration 0-62 mph (100 km/h) in 3.4 seconds.
All of this was feasible - and, indeed, the information was supplied by Jaguar - but none of it was actually true. The C-X75 show car was powered by nothing more sophisticated than an electric motor from a golf-cart. Its top speed was perhaps as high as 30 mph (50 km/h)….
[But] C-X75 had done its job: a dream car that drew attention to Jaguar, an optimistic symbol for the marque's future. It wasn't expected, or intended, to go any further. But within JLR management there was a small group who thought that Jaguar should build a car like this, a high-technology supercar made in small numbers and sold at an appropriately high price to wealthy enthusiasts. Evidently, Ratan Tata also liked the idea, as Carl-Peter Forster came back from a board meeting in India in December and asked JLR engineering director, Bob Joyce, to find a way of turning the C-X75 into a production car.
The go-ahead was announced to the outside world the following May, just as Tata Motors presented its results for 2010/2011, showing a £1.15 billion profit for JLR.
The financial result vindicated the company's decision to maintain investment through the downturn. Ralf Speth could say with some pride that JLR was back on track, the new model plan was stabilised, and not only had it been decided to keep all three plants open but their full utilisation was in sight….
Ford continued to build all the engines for Jaguar and Land Rover but had made it clear at the time of the takeover that it would not do so indefinitely. There had been speculation about an alternative source of supply but, as JLR's volumes increased, the idea of setting up its own engine manufacturing plant became more attractive. In September 2011, it announced a £355 million investment in an engine plant to be built near Wolverhampton, in the West Midlands. It will make JLR-designed four-cylinder petrol and diesel engines and is expected to be up and running in 2014.
Carl-Peter Forster had referred to this engine programme 18 months earlier but he would not be at JLR to see its fruition. Suddenly and unexpectedly, it was announced on 9 September that Forster had ceased to be the group chief executive of Tata Motors. The statement said that he had stepped down due to 'unavoidable personal circumstances'; an illness in his family required him to be in Europe for more time than his commiments in India would allow.
Forster was not replaced directly. Ravi Kant, who had been appointed non-executive vice chairman of Tata Motors on his retirement, took back some of his old responsibilities. Ralf Speth's position as chief executive of JLR was unchanged; he had already been appointed to the Tata Motors board of directors….
On the Frankfurt show stand, between the Jaguar and Land Rover displays, was a bold sign with the letters 'JLR'. The industry understood it - as will readers of this book - but the general public were confused. It was the first and last appearance for this corporate logo. In the eyes of the outside world, the two car brands were all that mattered.
Reproduced with permission
JEWELS IN THE CROWN
HOW TATA OF INDIA TRANSFORMED BRITAIN'S JAGUAR LAND ROVER
Author: Ray Hutton
Publisher: Elliot & Thompson (Distributed in India by Penguin India)
Pages: 193 (including appendix)
Price: Rs 699
