10:21 am, July 15, 2024
JLR CEO Adrian Mardell has told investors that the company will cut five models with ‘close to zero profitability’ this year, according to Automotive News Europe (ANE).
Speaking at an investor’s days last month, Mardell revealed that the XE, XF, F-Type, E-Pace and I-Pace are all due for retirement, as JLR pivots to become a luxury all-electric brand.
According to the report, the F-Pace is the only model to remain in production from the current line-up, with the first of three all-new EVs to be unveiled next year.
JLR has been working on an all new platform, dubbed Jaguar Electrified Architecture (JEA), which will underpin the new vehicles.
JLR’s CEO says that axing the five models will help increase the average selling price of the company’s products.
‘We are eliminating five products, all lower value. None of those are vehicles on which we made any money, so we are replacing them with new vehicles on newly designed architectures,’ Mardell said during an investor day on June 19, according to ANE.
The news follows record-breaking sales for JLR, as the company said it made £29bn in revenues over the year to the end of March 2024, more than a quarter higher than the previous year.
However, the numbers were predominantly driven by huge sales of its Range Rover, Range Rover Sport and Land Rover Defender vehicles. Those three models contribute to 85% of JLR’s ‘value’, Mardell claims. He did not clarify whether value meant revenue or profit.
Not surprisingly, the F-Pace was one of the biggest selling Jaguar vehicles in three months to end of June this year, with some 5,292 units accounting for a third of Jaguar’s total sales.
However, the decision to pivot to an electric-only brand hasn’t been received positively everywhere, as we reported last month that Canadian Jaguar dealers were gearing up for legal battle with the manufacturer over its plans to switch to a lower volume, electric future.
Canadian dealers are said to be furious sales numbers will plummet from some 8,000 cars a year to around 700 when a new electric car is launched next year.
This also follows news that Jaguar was set to cut its number of UK showrooms from around 80 to a quarter of that figure, as it didn’t need as many to cope with its new electric brand.
‘Our business model is not going to be succession of increasing variable marketing [e.g. discounts] and fixed marketing expenses to try and keep our plants full,’ Mardell said at the investor’s day.
‘That was a mass premium model. Our model is very, very different and there is huge opportunity in front of us to excel.’
Mardell hopes that the sale of exclusive, limited edition versions of its vehicles will help boost profitability in a new ‘halo strategy’ push.
