Jaguar Learns From Past While Looking to Future

Jaguar Cars must draw inspiration from its past but not attempt to recreate it, as the luxury marque drives toward a “fresh start” under the ownership of India’s Tata Motor Ltd., a top executive says.

“The legacy of our past is a great influence for our future,” Mike O’Driscoll, Jaguar managing director, tells Ward’s. “I think we have a fresh start to remake Jaguar in the image of our past as a maker of beautiful, fast cars.”

From its humble beginnings as the Swallow Sidecar Co., a manufacturer of motorcycle sidecars, Jaguar blossomed into one of the world’s most iconic auto brands. Models such as the XK120 in the 1940s and the venerable XKE of the 1960s cemented the marque in automotive lore.

However, under the leadership of Ford Motor Co., which bought Jaguar in 1989, O’Driscoll says the essence of the brand became diluted when the focus shifted to increasing volume rather than remain true to its roots as a manufacturer of exclusive sports cars.

A prime example is the ill-fated X-Type, which debuted in the U.S. in 2001 as an ’02 model. Sharing a platform with the European Ford Mondeo, the so-called “baby Jag” struggled to find a niche from the beginning and finally was pulled from the U.S. market late last year.

“In the segment we’re operating in, it’s not about the number of cars you sell, but rather the quality and the relationship you have with your owners,” O’Driscoll says.

’09 Jaguar XF strong indicator of brand’s future direction.

“It’s very important we don’t once again get drawn into the search for volume that was so alluring to Jaguar when part of Ford,” he adds, noting the sale to Tata should be completed in the next month or so.

Paul Newton, a U.K.-based analyst for Global Insight Inc., says the X-Type was just one of many Jaguar missteps under Ford’s ownership.

“The X-Type didn’t do anybody any favors, and its lack of success was testament to that,” Newton tells Ward’s. “There hasn’t been the direction and clarity that’s been required (of Jaguar). I think Ford hoped it would be a BMW/Mercedes-Benz competitor, but there hasn’t been any long-term vision.”

That said, the Jaguar brand still carries “a strong premium cache,” Newton says, adding if Tata supports the brand in the manner deserving a luxury auto maker, it could very well make a strong comeback.

“With the resources Tata can (offer), anything is possible,” he says. “But what their strategy and plan is we don’t know yet.”

But not everyone thinks Ford harmed Jaguar.

Dennis Eynon, former president of the 6,000-member Jaguar Clubs of North America, says Ford did an excellent job of improving the brand’s engineering and quality, an area that troubled Jaguar in the past.

With those concerns out of the way, Jaguar is in an ideal position to leverage its past as it moves forward, he says.

“Overall, Jaguar has a mystique about it; it has drama; all the elements that pull at the heartstrings of people who love motorcars,” says Eynon, who fell for the marque at the age of eight when he took his first ride in a ‘52 Jaguar XK 120 Roadster.

Charles R. Hughes, former CEO of Mazda North American Operations and president of Land Rover North America, argued before the deal with Tata that Ford should hold onto Jaguar, maintaining that the “glamorous and romantic” brand could thrive given the right leadership.

Key to the brand’s success today is leveraging its history of great designs, he says, insisting Ford has left Jaguar in good shape.

“I think (Jaguar) should be inspired by its past,” Hughes tells Ward’s. “Most of its (competitors) are German (makes) and their design is very formulaic. So I think Jaguar is ideally positioned to bring out cars that are better looking, and that’s what people want them to do.”

In order to be successful, Hughes says Tata must support Jaguar with experienced management and provide the necessary capital to fund future products. However, investment has not been the silver bullet some expected, evidenced by the billions of dollars Ford poured into the marque with little to no return.

Since day one of Ford’s ownership, Jaguar has been a drag on the Dearborn, MI-based auto maker’s soon-to-be-defunct Premier Automotive Group, which also included Land Rover and Volvo Car.

Ford doesn’t break out individual financial results for its brands, but Jaguar often has been criticized as the main drag on PAG’s earnings.

However, things have changed. According to a recent filing with the U.S. Securities and Exchange Commission, Jaguar and Land Rover, combined, posted first-quarter pre-tax earnings of $421 million this year.

Although O’Driscoll declines to reveal which brand accounted for the bulk of the profits, he does say Jaguar now is in the black. Decidedly optimistic about life under Tata, he says Jaguar is going to concentrate on building fewer but more-expensive cars than in the past.

He points to the recently released ’09 Jaguar XF sports sedan as an indicator of where the marque is headed.

“We believe passionately Jaguar is a luxurious, exclusive and sophisticated brand, and I believe the XF is the cornerstone of our rebirth in many ways,” he says. “Look for us to build more expensive cars in years to come.”

O’Driscoll adds that it’s important to have the “courage of conviction to build cars that define the future in a unique way that’s synonymous with Jaguar’s sense of style and sensibility.”

At the same time, Jaguar will return to its roots as an early adopter of cutting-edge technology, he says, citing the auto maker’s leadership in the development of advanced engines, disc brakes and aluminum monocoque body structures.

“Young engineers want to join the company because of our passion for building high-tech cars and creating wonderful designs that stand apart.”

But while Jaguar looks to incorporate strength from its past as it moves into the future, it won’t be borrowing any aspects of the time spent under Ford ownership, O’Driscoll says.

“I’ve been at Jaguar 30 years now, and for me and a lot of people like me, there’s a sense of mission about what we have to do to put this great brand back on track,” he says. “We’ve had a traumatic last decade, but what doesn’t kill you makes you stronger, and we want to build a great future.”

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