Next door, in the firm’s historic Brown’s Lane plant, a less illustrious chapter in the luxury-car manufacturer’s history unfolded last week as Jaguar announced to staff it would close the assembly line there and shed 1,100 jobs across the group.
Despite owning Jaguar for 15 years, during which time it has pumped in massive amounts of cash, attempts by Ford to revive that golden age remain elusive. Sales this year have disappointed, due in part to a desertion of the brand by buyers in America (Jaguar’s biggest market). This has been partly caused by the dollar’s weakness against sterling.
Its performance led to production cuts of 15,000 this year and helped drag Ford’s premium cars group — which includes Land Rover, Aston Martin and Volvo — to an unexpectedly high loss of £201m in the second quarter.
The closure of the Brown’s Lane assembly line was based on the inescapable logic that producing 125,000 cars a year at three different factories was inefficient and costly.
Despite this, and other cost-cutting measures such as the decision to cease Formula 1 racing, Jaguar is still loss-making and faces a long struggle to escape from its current malaise.
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Part of the problem is the product range. Volumes of its cheaper X-type and S-type cars have not come close to Ford’s original targets.
Jaguar has now abandoned its target of producing 200,000 models a year and is aiming to stabilise sales at the current level of 125,000.
New products and models have been slow in coming. Two years ago it shelved plans for a revival of the E-type (codenamed the F-type) while German and Japanese competitors churned out relatively affordable sporty two-seaters. Meanwhile, sales of Jaguar’s premium XJ and XK cars have dropped back in America and diesel-powered models have only recently come online in the European market, although sales of the X-type are up 35% on last year as a result.
Even so, Jaguar looks doomed to remain a minnow. It faces fierce competition from BMW, Mercedes and Audi, which between them produce well over 2m cars a year.
“We’re never going to achieve the volumes of BMW,” a Jaguar spokesman admitted. “We need to be addressing a different part of the market. We are about luxury and exclusivity. That’s where we are most successful.”
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Jaguar insists the measures announced this week will revitalise the company. An all- aluminium version of its XK sports car will be on sale in early 2006, and benefit from a promised styling revolution.
Industry observer Gavin Green, a former editor of Car magazine, sees styling and branding as key to Jaguar’s future fortunes. The brand has drifted in the past few decades with traditional styling that gives it the image of an old man’s car in the eyes of many potential buyers, he said.
“In my parents’ generation Jaguars were cars you really aspired to. They were winning Le Mans and the E-type was the car everyone wanted, but since then there’s been nothing to keep that image going.
“Under Ford, Jaguars have got back their quality and reliability, but they have lost some of that youthful verve they once had.
“They have not got the image, and that’s important in the premium-car market. They have some good cars, but it has been a long time since they have had sexy cars. They really need to appeal to younger people, and that’s something the German manufacturers such as Audi and BMW have done very successfully.”
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Dr Paul Nieuwenhuis, assistant director of the Centre for Automotive Research, agrees that Jaguar faces a problem in how to develop its product range to have more youthful and modern appeal without losing the essence of what the Jaguar brand stands for.
“You can rejig the brand values to a certain extent, but it’s a difficult place to be,” he said. “Jaguar was criticised for keeping the styling of the latest XJ the same despite the fact that it was such an innovative, world-class car, but then that’s what the target market for that car probably wanted.”
But one industry analyst, who asked not to be named, doubts that any amount of tinkering with the branding can make up for a product range that has simply not sold in the numbers promised or offered a return on Ford’s investment.
“All of their new models have been failures. They are way off their original volume targets. Ford has owned it for 15 years now and it has pumped hundreds of millions of pounds into it. From what I have heard it’s about £500m, and that’s such a lot of money. Jaguar is an irrelevance in the global car industry now.”