Industry publication calls time on JLR’s sob-story.
It came as a bit of a shock when Jaguar-Land Rover, the British luxury car group, posted its quarterly financial report for Q4 2018. Industry observers were aware that JLR were having a tough year, but with a recorded loss of US$4.4-billion in just one quarter, many of us were left floored.
JLR cited “challenging market conditions in China” as the primary source of its issues, pointing at the market that in 2018 shrunk for the first time in nearly 3-decades. They also said that the trade-war between China & the US played a role, too. In fact had they not pointed out that trade war, we’d have taken their word at face value.
But as Automotive News Europe pointed out, JLR has never built cars in the US for export to China, which means they’d have escaped that trade-war unscathed. Further, the luxury segment in China grew by 8% in 2018, with all players (like the German trio of Mercedes-Benz, BMW, and Audi, as well as left-of-field players like Lexus, Volvo, and even Cadillac) recording strong sales that eclipsed the numbers from the year before.
The dots JLR didn’t want to have connected were between their sales slide and their continued quality control issues. Actually we say ‘slide,’ but a 22% reduction in sales figures is more like a cliffhanger, light of the hanger.
JLR has been building its cars in China since 2014, with a joint-venture inked between Coventry and Chinese counterpart Chery Automobile. The Range Rover Evoque, Land Rover Discovery, Jaguar XF & XE long-wheelbase, and E-Pace have been built there since. But product quality was an issue in 2015 and it still is today, with J.D. Power surveys saying that both Jaguar & Land Rover routinely rank below the industry average for a 3-year old vehicle in terms of quality & reliabiliity.
In China through calendar-year 2017, JLR issued no less than 13 recalls for issues, defects & anomalies with components like instrument panels, airbags, batteries, and even engines. Those recalls affected more than 100,000 vehicles, which was equivalent to in excess of 70% of new cars sold that year. The situation has gotten so bad that Jaguar & Land Rover owners have resorted to protesting outside JLR’s offices in Shanghai, in an attempt to bring more attention to the situation.
At the moment, JLR is busying themselves to try and raise US$1-billion to service near-term debt, to tide them over the year as they release new models like the new Range Rover Evoque, refreshed Land Rover Discovery Sport, all-new Defender, and all-electric Jaguar XJ. But if their quality remains an issue, it won’t matter how many new cars they put out. They’ll still be seen in China, the world’s largest car market and home of hilariously-bad knock-offs, as low-quality, unreliable junkers.
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