Jaguar Land Rover yesterday announced plans to restructure, including closing down one Midlands plant, as well as confirming that it will build the Range Rover LRX.
Here, Autocar's Steve Cropley talks to David Smith, managing director of Jaguar Land Rover, about the company's plans.
How big do you want the combined Jaguar Land Rover operation to get?
The first objective is going to be to achieve 300,000 sales a year, which is a figure we got close to a couple of years ago. But I think there’s scope for more.
How about 400,000?
Let’s just say ‘more than 300,000’. But when you see how the demand for premium cars is expanding around the world, you have to believe we can do well out of it. Chinese owners buy 250,000 premium cars at present, and it’ll double in four years, and probably double again after that. Add demand from Russia and India, and you’re looking at very big numbers.
What about additional models? What scope is there for more of those?
When LRX is launched next year we’ll have nine models. We see scope both for new models and off-shoots of existing cars – maybe two or three over the next few years.
Are you looking at making cars away from the UK?
We believe that to be a serious player you have to do that. It doesn’t threaten what we’re doing here, but it means we might well have assembly operations elsewhere.
Can you say where?
Not really, but the expanding markets - India, China, Russia - would certainly make sense. But again, we’d be talking about assembling cars from kits of parts sent from here.
You’re closing a Midlands factory. What’s the point of that?
We have to improve our efficiency and flexibility. The whole range is being changes - we’re going to take 400 to 500 kilograms out of a Range Rover with aluminium construction - and use a lot of the expertise we’ve already accumulated with the aluminium Jaguars. It makes sense. We aim eventually to be making more cars in one plant than we’re presently making with two - that has to bring economies.
It’ll lower your break-even point, won’t it?
That’s the point, really. This has been a horrendous year: we’ve lost around 100,000 units, a drop of about a third. But under the reorganisatrion we’ve outlined, we’d still be making money at today’s volumes, whereas we’re finding profits pretty elusive as things are organised today
The plant that’s going has to be Solihull, doesn’t it?
Really, we haven’t reached a final decision. We don’t have to make it until the middle of next year, and the reason we’ve said anything is possible at this stage is because we want to come to the final judgement with the unions, in a very objective way.
You’ve had reliability issues with Solihull Land Rovers, but Castle Bromwich Jaguars win awards. Can Solihull people fit the Castle Bromwich culture?
We think they’ll fit perfectly well. So do the unions. As a matter of fact, we’ve already got about 200 of them working at Castle Bromwich on the launch of the Jaguar XJ, and that has worked out fine.
How do the unions view the closure of a Midlands plant?
Apart from some pension issues, the reception has been absolutely great.
British companies always have crises. Can JLR truly succeed?
More than that, it has a truly great future. One reason we’re being so open about revealing most of our strategy plan is because we think the future is ultimately very bright indeed, and we want everyone - unions, workforce, buyers = to feel the same. But to achieve it we have to keep our foot on the gas, and everyone has to know that, too.
David Smith was talking to Steve Cropley