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Jaguar Land Rover confident of China prospects despite hiccup

SHANGHAI – Jaguar Land Rover is confident of its China prospects despite a market “new normal” and the recent drop in sales here, according to Bob Grace, president of Jaguar Land Rover China.

Grace made the comments on the sidelines of Auto Shanghai 2015 on April 20.

JLR, fourth in China’s luxury segment race after Audi, BMW and Mercedes-Benz, saw sales in the first quarter of 2015 drop about 20 percent year-on-year to 23,526 units. It had a record year in 2014 in which sales topped 122,000 units.

“There is no doubt that the new normal is bringing its challenges. But the confidence comes from the continued intensive investment that we are making in a range of new products. We are going to bring 50 new models and variants in the course of the next few years with investment of about £4 billion ($6.06 billion) per year.” Grace told CBU/CAR in an interview along with JLR CEO Dr. Ralph Speth.

Grace stressed that the number 50 is the China figure. “Every car that is built, we build for China. There is no car that is only special for one market,” said Grace.

Grace believes new models such as the Jaguar XE and XF as well as recent introductions of the Land Rover stable are the “lifeblood” of JLR and they give the British carmaker confidence despite the fact that there are some issues in the market place today.

 

Customer and people first

One of the challenges Grace was referring to was model changeovers. “Not only did we change over from the imported Evoque to the locally-produced Evoque, but we also ran out of the Freelander 2 and Discovery Sport. About half of our normal volume was affected by those major transitions,” said Grace.

To address this problem, JLR will continue to work with its retail partners.

“We are into the first few days of sales of the locally-made Evoque and to get them delivered to the showrooms. We want to work closely with our retail partners to get more showroom traffic, to get more people driving the car,” added Grace.

Just as it was rolling out the locally-built Evoque, JLR also had to deal with the recall of the imported Evoque after an issue with its 9-speed AT was exposed on national TV during the annual March 15 Gala.

Both Grace and Speth were quick to comment on the issue and how the company handled it.

“We had an issue on March 15 and I have to say Bob and the team managed it in a way that reflects that we care about the customer,” said Speth. “We say customer first and it’s not only about customers externally but also internally. From one process step to another process step we want to make sure that this kind of care is for the customers and employees.”

“In five years since we have started our commercial activities here we have been very conscious that we do within the law and rules and work with the Chinese system as good corporate citizens,” added Grace.

Grace said at the JLR press conference at Auto Shanghai that customer is always at the center of what the company does and if it doesn’t focus on them, then its growth would mean absolutely nothing.

“Customer first has been the reason for our success and foundation for our future development. Mistakes may happen, but we will always manage them in a reliable and responsible way and put our customer interest at heart,” said Grace.

Another issue JLR had to confront was the departure of Lu Yi, president of JLR’s Integrated Marketing Sales & Service (IMSS) organization that oversees the integration of sales of both imported and locally-made models after the formation of the Chery-JLR JV.

“It’s not really what we wanted but these things happen and we will move on. We still need to make sure we deliver great products whether they are imported or locally produced through one dealer network that offers our customers products at different price points,” said Grace.

“If I step down tomorrow, I hope somebody else younger, better looking and more powerful takes over and do even better than I,” quipped Speth, who stressed that as a small company the business is about people and a closer relationship is more important. “We do not need full dotted lines to have a certain relationship to manage,” said Speth.

Speth stressed that customer is at the very top of the blueprint “triangle” for success and the values and principles of respecting people, the environment and society are the same around the world.

In fact, JLR launched its new CSR initiative – 1001 Dreams – at Auto Shanghai 2015, which aims to involve the public, owners, employees and the media to help drive the dreams of hope schools in earthquake affected areas in Sichuan and Yunnan.

 

Grow with the market

While JLR sales in China last year represented a 10-fold increase over sales in 2009, a year before JLR officially entered the Chinese market, the future roadmap here will be about growing with the market, according to Speth.

“China has been for some time the most important market for JLR. We want to take care of the market and also develop the best vehicles and grow with the market in China,” said Speth. “We are trying to make sure the necessities of the customers in China, such as luxury space, package and requirements are met.”

Speth expects growth in the Chinese market will continue and the premium segment to grow over-proportionately because there will be further growth of wealth, population and therefore mobility. “We have the biggest market on earth and I assume that in a very short period of time we will reach 30 million units here,” said Speth.

“Success is a gradual process, by building it step by step, we have provided a strong foundation for our sustainable growth in China,” added Grace.

This year, Jaguar will be celebrating the brand’s 80th anniversary and Land Rover the 45th. By 2016, two more models from Jaguar and Land Rover will go into production at the Chery-JLR JV. The locally-built Evoque is now available for sale at 190 dealers across the country.

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