Wednesday, August 16, 2006

Opinion: Jaguar selling options

This is one of the hot subjects in the automotive industry. It has been said several times that Ford is interested in selling Jaguar. And it was referred previously the interest of Renault in buying the British luxury brand. That would be a much more interesting move by Renault than engaging in an alliance with General Motors… Lately it was rumoured that Ford might also sell Land-Rover together with Jaguar in order to make the deal more appealing. This would not be a good business move by Ford but then, more important things are worrying Ford managers these days.

A different alternative…
First let’s consider the problem with Jaguar: the brand needs a lot of investment in new models, new platforms, new marketing, closing of factories, etc. And Ford is not in a position to make the strong investment needed. This has been made clear by the strange absence of prototypes of the next S-type out in the open. Jaguar is taking too much time to replace this model and also no clear perspectives of the X-type substitute are known. Remember, Jaguar is a proper luxury brand: it needs to have the best architecture available and that means a longitudinal engine placement and rear-wheel drive. And of course, top engines, gadgets, materials, technology, safety, etc. And all of these things (and particularly the superior RWD platforms) are very expensive to develop.

The alternative route that auto-future humbly proposes is the partnership with another manufacturer. Not a selling business, but a cooperation with profit sharing but crucially, sharing of development costs. Eventually with a future-sell option. It has been said before that PSA should make a very strong effort to buy Jaguar (check the previous article on Renault and Infiniti). The alternative proposed here is the joint development and management of the Jaguar brand by Ford and PSA. Just like these two companies already operate with diesel engines.

It is important to note that these two companies are well known for successful partnership relations. PSA already joined efforts with: Renault, for V6 engines; Fiat for MPV’s; Toyota for the infamuous triplets (C1, 107, Aygo); Mitsubishi for the next SUV; BMW for the future 1.6 engines and of course Ford for the current diesel range. Ford of Europe also had its share of successful partnerships: VW for the Sharambralaxy model; Nissan for a SUV model; Fiat for the next Ka replacement as well as the referred diesel deal with PSA.

However, this is an entirely different proposition. Jointly running a brand is very different from jointly developing engines or a model. The benefits for both Ford and PSA must be clear as well as their role in the whole process. The benefits of jointly developing a familiy of state-of-the-art RWD platforms are evident for Ford, since these could be used by several other brands of Ford. But also PSA could make good use for these as well as bigger engines in future replacements of the 407 and 608 models or make something like the 908 concept possible. But most of all, spliting the sky-high development costs by half is a critical advantage for both companies.

Having said this, one thing should be made clear. The PSA liasion is interesting because PSA needs a prestige brand in its portfolio. And Ford can’t afford to invest heavily in Jaguar. But the Renault alternative is more rational because the Nissan-Renault alliance already has the goods in the shape of the credible RWD platforms from Infiniti. Renault will not need to invest so heavily. I care alot about PSA, maybe this is why this romantic alternative is suggested.

The one thing that really needs to be properly accomplished…
Design! Cars in the luxury class need the right technology with the right design. And this needs to work whether it will be done by Ford, Renault, PSA or any other company. And in Jaguar’s case this means that the current trend was wrong. The X-type and XJ failed because these models are too classic. Jaguar needs a thing called retro-avantgarde design. Modern design with retro influences. This looks difficult to accomplish but look at the good examples: Chevrolet Camaro concept; Aston Martin range; Ford Mustang… just get the right designer.
Nice... but not good enough!

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