Former Marshall Motor Group boss Daksh Gupta has warned that Jaguar Land Rover dealers could face a major challenge covering the cost of their showrooms as Jaguar’s reinvention reduces sales volumes.
Gupta, whose former dealer group operated a substantial JLR portfolio, questioned how retailers would support the overheads associated with the manufacturer’s expensive ARCH facilities.
Speaking on the latest Car Dealer Podcast, he pointed out that dealerships had invested heavily in premises designed to accommodate both Jaguar and Land Rover.
However, Jaguar’s move towards a lower-volume, more exclusive electric future means the number of vehicles passing through those showrooms is likely to be considerably smaller than originally anticipated.
Gupta said: ‘These facilities were built with Jaguar Land Rover in mind, in terms of a facility.
‘If you haven’t got a freehold and you’ve got a lease, how do you cover that overhead?
‘Because the volumes that probably would have been planned to go through those facilities is going to be lower.’
Gupta was speaking to hosts James Baggott and Jon Reay following a recent Car Dealer interview with Range Rover managing director Martin Limpert, who said the manufacturer’s retail network was now in a good position after years of change.
The former Marshall chief executive said he had overseen a substantial investment programme in JLR dealerships during his time in the motor trade.
‘We all made huge investments as the retailer network in ARCH facilities,’ he explained.
‘I think the brands deserve that because it was a massively under-invested network for many, many years.
‘We had sort of 10 ARCH sites in totality, so we were a big partner.’
Gupta said the challenge now was ensuring retailers could generate sufficient business to support those investments.
He suggested new products, including the forthcoming Range Rover GT, could play an important role in replacing some of the volumes previously generated by Jaguar.
‘Products like the GT, which I’ve seen, which I think looks fab, by the way, I think that has to help compensate for some of the volume that you probably would have had historically going through Jaguar.’
Despite raising concerns about dealership overheads, Gupta remained optimistic about JLR’s future.
He praised the progress made by Range Rover over the past two decades, highlighting the brand’s move further upmarket and its ability to command substantially higher prices.
Recalling his time selling Range Rover Sports in 2008, Gupta said the vehicles had cost around £40,000, illustrating how far the brand had moved since.
He also backed Jaguar’s controversial new direction, saying he liked the design of its forthcoming model despite the divided reaction.
‘I appreciate there’s lots of Marmite views on that car. I actually think it was great, personally,’ he said.
Gupta added that he remained a strong believer in the appeal of premium automotive brands and expected customers to continue paying more for desirable products.
He also stressed that JLR management would be well aware of the challenges facing retailers.
‘All OEMs totally understand you have to have a viable network,’ he said.
‘I’ve always said there’s a symbiotic relationship between the retailers and the OEMs.
‘The dealers and OEMs actually want the same thing.’
He argued that tensions between manufacturers and their retail partners generally came down to investment requirements and sales targets, rather than fundamental differences in their objectives.
Gupta concluded that the strength of JLR’s brands should help the network navigate the changes.
‘I’m pretty certain, with that strength in brand, they will get through,’ he said.