Tata Motors Investment in New Models Shows Results
31 Maggio 2016 - 11:02PM
Dow Jones News
By John D. Stoll
Kevin Dause approached his 50th birthday with an important item
on his to-do list: Ditch the minivan and get a luxury sport-utility
vehicle.
The vice president of an insurance consulting firm in
Schaumburg, Ill., stopped at a Volvo dealership, then priced two
Porsche SUVs and later perused Land Rover's website. None had a
vehicle that appealed to him, and the brand that did, caught him by
surprise.
"I wasn't looking for a Jag," Mr. Dause said in an interview
shortly after taking delivery of a Jaguar F-Pace painted British
racing green. He initially expected to wait nearly five months
after ordering the hotly anticipated crossover SUV, but the vehicle
showed up about a month early.
Tata Motors Ltd.-owned Jaguar is well regarded for pricey luxury
sedans and sexy roadsters, but hasn't been known as a fast-footed
car company. Jaguar is one of the last luxury brands to jump on the
SUV craze. Its transformation comes as the brand's sticker prices
are falling, a trend widely employed by premium car makers looking
to lure a broader range of customers while interest rates are low
and light-vehicle demand is running at a record pace.
Since buying Jaguar and Land Rover from Ford Motor Co. in 2008
for $2.3 billion, Tata has spent billions of dollars updating the
two brands to better compete against German and Japanese luxury car
makers. Land Rover last year was the fastest-growing brand in the
U.S. amid a wider boom in demand for bigger vehicles, and Jaguar is
becoming more relevant to a bigger swath of buyers.
When Tata bought Jaguar eight years ago, there were already 18
luxury crossover SUVs on the market and only three brands -- Volvo,
Porsche and Toyota Motor Corp.'s Lexus -- counted one of those
models as the highest-volume product. A crossover SUV is typically
based on car architecture, such as a sedan, but built with bigger
proportions and higher off the ground.
Today, there are 35 luxury crossover SUVs and the segment's
share of total U.S. light-vehicle sales has nearly doubled compared
with 2008, to 5.2%. Eight brands now claim a crossover SUV as their
top seller.
Jaguar Cleveland President Jeffrey Davis, who unveiled the
F-Pace to a crowd of prospective buyers last week, said dealers
have asked the brand's owners to deliver an SUV capable of battling
BMW AG's X5, or Porsche AG's Cayenne. Those crossover SUVs changed
the profile of German brands known for their cars -- and helped
spark wider interest in the segment.
Jacki Whitlow, who attended Mr. Davis's launch party, stepped
out of a silver F-Pace in the Cleveland showroom and said she plans
to trade in her Lincoln MKX sport utility for the new Jag. Her
husband recently bought an electric BMW sports car from another
dealership that Mr. Davis owns.
Other dealers say Jaguar needed to bring out a premium crossover
SUV.
"This is the heart of the market," said Jack Weidinger,
president of Jaguar of Great Neck on New York's Long Island, which
has been selling the brand since 1938. In 2003, he was among a
group of dealers pressing Jaguar's then owner Ford to catch up with
market trends and consider bringing out an SUV to help a brand that
then was a perpetual money loser.
On Monday, Mumbai-based Tata Motors reported earnings for its
fiscal fourth quarter ended March 31 tripled due to strong results
at its Jaguar Land Rover business. One reason: the Jaguar XE, a new
aluminum-bodied luxury sedan priced to compete with Cadillac,
Lincoln and Lexus products. The entry-level car has been attracting
new buyers to the brand, say dealers. Shares of India's largest
auto maker rose 12% to $33.50 in 4 p.m. EDT trading on the
NYSE.
The F-Pace, a five-passenger midsize vehicle priced between
$40,000 and $70,000, offers a second way to cash in on SUV demand,
in addition to Land Rover.
Volkswagen AG's Bentley unit is getting into the SUV market with
the Bentayga, an about $253,000 off-roader hitting the market as
General Motors Co.'s Cadillac, Volvo Car Corp., Audi AG and Lincoln
all update their SUV offerings.
On Wednesday, Jaguar is expected to report that its May
dealership traffic in the U.S. hit the highest level for a
single-month since 2008, and say the F-Pace is sold out through
July, a spokesman said. About 9,500 people hit Jaguar showrooms in
May, compared with 3,800 in the same month a year ago.
Write to John D. Stoll at john.stoll@wsj.com
(END) Dow Jones Newswires
May 31, 2016 16:47 ET (20:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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