With the upcoming death of the X-Type, Jaguar is in a better position with two distinct platforms (XF and the XJ/XK) but it is also has one basic family of running gear and one factory at Castle Bromwich.
To make things more complex, Land Rover had healthy annual volumes (over 220,000 units) before the global crash and was benefiting from good margins, especially on the three largest models. Jaguar, by contrast, might be leaner but it might shift only 65,000 units annually, when you discount the X-Type.
Pulling these disparate technologies and model lines within JLR into one healthy whole is possible. But it is also going to be expensive and take a few years to achieve.
The importance of synergies – sharing products and technology – across as many brands as possible was underlined today by a new report from auto analysts at BernsteinResearch.
In a note warning that VW should not pay too much for its takeover of Porsche, Bernstein reveals that the Cayenne SUV generated half of Porsche’s earnings.
Apparently, Porsche carried out much of the R&D work for the Cayenne-Touareg-Q7 family and VW paid for the capital costs of production.
This deal allows Porsche to buy the Cayenne from VW’s Bratislava factory at a very competitive price and so it enjoys healthy profit margins.
Of course, had Porsche not joined forces with VW it could never have engineered and launched the Cayenne under its own steam. (Indeed, it could not have built the Panamera without the healthy profit margins generated by the Cayenne).
Unique, low production run automotive technology is increasingly ruinously expensive, according to Bernstein. The 911 family (including the Boxster and Cayman) is said to be expensive to build. But, luckily, the 911 commands a premium showroom price.
The truth is that long-term survival in the auto industry demands either bulletproof premium pricing and consistent sales or ever-increasing levels of component sharing. And the latter is a much more reliable bet than the former.
JLR might reflect that even Porsche, which enjoys the highest profit margins in the industry, achieves this by sharing plaforms with the mass-market VW brand.