9:02 am, June 2, 2023
JLR has confirmed it will be cutting the number of dealers that represent its brands as part of its transformation plans.
In an interview with Car Dealer yesterday, the JLR executive team confirmed the size of the network will have to be reduced as the firm moves from ‘volume player’ to ‘modern luxury brand’.
Unveiling more details of the firm’s ‘Reimagine’ strategy, acting UK managing director Patrick McGillycuddy confirmed the JLR network is set to shrink.
He and his executive team also outlined plans to move to agency sales across all its brands by late 2024.
McGillycuddy would not be drawn on how many dealers will lose their franchise, but confirmed the network will be shrinking.
JLR is implementing a ‘House of Brands’ strategy which will see dealerships split into different areas to focus on Range Rover, Defender, Discovery and, in some cases, Jaguar.
However, not all dealerships will sell Jaguar models as it moves to a premium electric car brand with its first model costing north of £100k.
Speaking about Jaguar, McGillycuddy said: ‘The brand has been completely repositioned.
‘This is about having a dedicated strategy and a dedicated approach. It’s not just about the product. And clearly as you move to a higher price position, you change how much volume you’ll sell in.
‘That does mean we’ll have a different representation strategy. It’s not appropriate to comment on what that shape or size is yet, because we’re still going through that process with our investment partners around what it looks like.’
Car Dealer reported earlier this year that JLR dealers had been told the brand wants to have just 20 dealerships representing Jaguar.
Vertu Motors has already booked a £1.5m impairment charge as it moves from having six sites selling Jaguars to just one.
McGillycuddy said ‘all partners are aware’ of the manufacturer’s desire to reshape the network. He also confirmed Jaguar will run a number of its own dealerships globally, but said these would be ‘more than just dealerships’.
He added: ‘They are beyond that. They’re about how we represent this brand in its new shape, with a new strategy, a new entity and to reestablish the Jaguar brand – so globally we will have a number of our own stores.’
Pull not push
The acting UK boss – who took over from Rawdon Glover earlier this year – said as car supply improves following the disruption caused by Covid, the car maker wants to continue building cars to order.
McGillycuddy added: ‘As we moved through that supply disruption, we had a deliberate strategy to focus on building the product that’s most profitable for us and for our partners.
‘So now, as we increase production, part of the strategy is supply always has to be behind demand.
‘That’s a fundamental shift in our model from pre-Covid times to post-Covid times. And when you fundamentally think about it, pull, not push, is a hallmark of a modern luxury brand.’
McGillycuddy said the brand had been forced to change its business model as disruptors from China head to the UK with an influx of electric cars.
He said: ‘There is a lot of change happening. It is more profound than anything in the 100-150 year history of our industry – petrol and diesel to electric, hardware to software, and the amount of new disruptors we’re seeing, particularly from China, will mean a phenomenal change.
‘We fully anticipate these well-funded, new electric vehicle organisations to come into Europe and to come into Europe at pace, with aggressive plans to grow.
‘So really, when you think about our strategy, we knew we had to change, we knew we had to start to do things differently.’
Dual Arch remains
JLR said its Dual Arch dealership concept (see video above) will remain as part of its new look. Its dealers invested millions in building the huge showrooms and those that remain with the car maker will be reconfigured to display the four brands.
A presentation (below) showed how one side of the dealer will showcase Range Rovers and the other will be split between Discovery and Defender.
‘Barriers’ for customers will also be removed like reception desks. The firm says some dealers have already removed these and replaced them with a barista-led coffee bar instead which ‘clients have responded well to’.
The image at the top of this story shows the coffee bar in the JLR’s latest dealership in Edinburgh.
Kirsty Griffin, network director and interim sales director for JLR, said pilots are already taking place around the country on the freshly formatted dealerships.
‘We are removing sales desks and replacing them with more comfortable seating,’ she said.
‘They need to be more welcoming and less formal. This is an evolution of the Arch concept.’
She said even the music and scents in the dealerships are being updated to reflect the firm’s new focus on luxury.
Part of the changes are a new workwear look with dealers given a ‘look book’ to follow. This means more blue suits and white trainers, with ties ditched in favour of white t-shirts. Dealers will be allowed to source the work wear from their own suppliers.
