Looking behind the headlines, Professor David Bailey, of Birmingham Business School, writes for Car Dealer on what Jaguar Land Rover’s ambitious announcement could really mean.
In setting out its new strategy, JLR has essentially set out a target to meet the government’s 2030 target for going electric, starting with Jaguar becoming an upmarket electric competitor to Tesla from 2025.
Land Rover and Range Rover brands will still produce hybrids through to 2036 in line with government targets.
By the end of the decade, every Jaguar and Land Rover model will be offered with a battery electric version. Longer term, hydrogen fuel cell powered cars could feature as well, prototypes of which will start rolling on UK roads in a year’s time.
And diesels will be ditched from 2026.
Overall this is a very welcome move by JLR to electrify but remember that the firm is playing catch up. The direction of travel is now clear, but how it will meet this goal is still to be seen. Indeed, big questions remain. What models will it make? How many cars will it aim to produce? How many workers will it need? And can the firm shift to an electric future on its own or will it need a partner?
Positively, JLR has said that it won’t shut plants and that here will be no compulsory redundancies. That’s good news for unions and workers.
The firm outlined investment in new platforms at Solihull and Halewood, but not Castle Bromwich, so where does that leave the latter, especially as the firm has canned the new electric XJ model meant to be produced there?
Castle Bromwich will continue to make the Jaguar XE, XF and F-Type models until the end of their current lifespans. Chief executive Thierry Bollore talked about ‘repurposing’ Castle Bromwich – although what for, isn’t clear.
He said that Castle Bromwich will ‘benefit from a consolidation’ of the firm’s other Midlands-based production facilities.
Cue much speculation about possible battery assembly. But given that the plant has a paint shop and a metal pressings facility, maybe using it for the firm’s niche high performance Special Vehicle Operations (SVO) could be a more likely option.
What is clear is that the firm is aiming to make fewer cars – ‘quality rather than volume’ – with less people, ‘rightsizing’ its operation. That will mean job losses, but how many is not clear. Meanwhile the firm has dropped its previous goal of producing a million cars a year.
And Bollore more than hinted that the new electric Jaguar brand will need to take a new direction. He said ‘Land Rover would be the SUVs’, effectively recognising that Jaguar SUVs cannibalised its market by competing with Land Rover and Range Rover products.
A specific all-electric platform for Jaguar will help differentiate it from Land Rover and Range Rover cars.
To cut costs, the firm will go from using five platforms, the expensive bits that underpin cars, down to three.
But developing new platforms is an expensive business especially in an electric age, and whether JLR can do this on its own, or will need to partner with another car maker is a big question going forward.
The firm has mentioned partnering with others in the Tata Group which owns JLR, but don’t be surprised if the on-going collaboration with BMW over electric motors and engines is pushed further.