LR2 Tested, Ready for Launch

SANTA BARBARA, CA – There already are more than 15,000 handraisers for the all-new Land Rover LR2 that will replace the current Freelander when it goes on sale in the U.S. in early April.

Globally, there have been more than 1 million visitors to the website for the new cross/utility vehicle, known as Freelander 2 in all markets but North America and the Middle East, says Phil Popham, Land Rover managing director.

The entry-level CUV launched in the U.K. Dec. 7 and rolled out in the rest of Europe with a diesel engine.

The auto maker has built about 150 prototypes of the gasoline-engine version slated for North America. Its 3.2L I-6 is mated to an automatic transmission and is not engineered for a manual, Popham says.

The LR2 has been tested on four continents in all elements and on all terrains, says Rory O’Murchu, LR2 body and exteriors engineering launch leader.

Land Rover, part of Ford Motor Co.’s Premier Automotive Group, globally has been selling about 70,000 Freelanders annually.

About 40% of sales have been the 3-door body style, the rest the 5-door.

With the new generation, the 3-door has been dropped. But Popham expects to continue to sell 70,000 units annually with the addition of new markets such as North America; Russia; Australia; Asia/Pacific, including China, South Africa and South America.

Land Rover LR2

The Freelander had been on sale in North America as a 5-door but was dropped in May 2005, when the auto maker lost its supply of gasoline engines, fallout from the collapse of MG Rover and its Powertrain company that provided the 2.5L V-6 for the CUV.

The Freelander will return to the U.S. as the LR2 after almost a 2-year hiatus.

U.S. sales of the Freelander peaked at 15,021 in 2004, according to Ward’s data, and the auto maker is expecting similar volume with the new LR2.

U.S. pricing starts at $34,700. Popham says the auto maker wants to retain the vehicle’s high residuals (pegged at 55%) and will not chase volume. But he does expect the U.S. to quickly become the CUV’s volume market.

Land Rover has the flexibility to produce more LR2s, if needed, at its Halewood, U.K., plant where the Freelander shares a paint shop (and basic color palette) and final assembly lines with the Jaguar X-Type.

Halewood currently is building about three Freelanders for every X-Type, Popham says.

The plant has produced as many as 200,000 vehicles in the past, but the 120,000 units it assembles now is pretty much its current capacity, given bottlenecks that would require investment to open up, Popham says. “We will do it if need to,” he adds.

The outgoing Freelander was built in Solihull, U.K., but production was shifted as part of Land Rover’s ongoing efforts to reduce costs. Solihull is operating at capacity (150,000 units annually) and squeezed an additional 15,000 vehicles out last year to meet demand, Popham says.

The Freelander and X-Type share no parts, but executives at both Land Rover and Jaguar Cars say the new assembly arrangement at Halewood is reaping savings.

Both vehicles trace their roots to Ford’s EUCD midsize-car architecture.

Popham says for Land Rover, it was more a case of taking technologies from the architecture (which it helped create) and crafting a unique vehicle, as opposed to taking an existing vehicle and adapting it for the brand.

For example, the LR2 is powered by a 230-hp I-6, an all-new engine developed with Volvo Cars, but presenting differently in the Volvo S80 and the Freelander to meet the performance expectations of the two vehicles.

Land Rover developed its own 4-wheel-drive system but taps the Swedish auto maker’s safety technologies.

There is no carryover from the first-generation Freelander. All aspects of the new CUV are new and advanced, developed within the Ford family.

Land Rover and Jaguar have, in fact, consolidated product development, with one group of engineers for both brands, says Al Kammerer, Jaguar head of product development.

There are separate program offices, engineers and designers to preserve brand integrity, Kammerer says. But the actual engineering is done as one big team that alternates between vehicles for each brand.

The group developed the Jaguar XK, then moved on to the Freelander and back to Jaguar for the XF that will replace the S-Type.

The benefit, Kammerer says, is engineers are constantly developing products, avoiding downtime that can occur with niche nameplates, and they keep refining and improving the process, applying lessons learned to each subsequent project.

A management team works on all projects simultaneously, he says.

To help the LR2 stand out in its segment, Land Rover is emphasizing its breadth of off-road prowess and traction expertise with such technology as terrain response that dials in the appropriate traction control for surfaces including as mud, gravel, snow, ice and sand.

Advertising in the U.S. will center on the idea the Freelander is class-leading off-road and competitive on-road, making it usable for everyone, Popham says.

That is a unique selling proposition for the relatively exclusive brand known for its off-road capability, but at a price.

Meanwhile, Popham says Land Rover will be profitable in 2007 for the third consecutive year.

Currency exchange rates still pose a problem selling in the U.S., but there is no interest in adding capacity in North America as long as about 120,000 of Land Rover’s 200,000 annual sales are in Europe. North America accounts for about 50,000 units, Popham says.

[email protected]