Jaguar Land Rover: Stronger and Faster in China

Bob Grace, president of Jaguar Land Rover China, is a fan of rugby. Now he finds the fun of competition in the Chinese luxury auto market. “I have been wrestling with the peers of Jaguar Land Rover around the globe,” he said. “Our goal is to turn the Chinese market into the biggest market for Land Rover within this year. And the same goal for Jaguar will be realized in the next two years.”

Bob Grace’s confidence and ambition come from the unexpected performance of Jaguar Land Rover in China. This brand entered China not earlier than 2003 and at that time it could only hundreds of cars in this country. After years’drastic increase, the British company sold about 18,000 cars in the first quarter of this year. With that amazing growth rate, China is quite likely to become its biggest market in the coming future.

One quarter v.s. One year

Bob Grace said that the Jaguar Land Rover actually sold 17,997 units of cars in the first three months of 2012, up 110% compared with the first quarter of 2011. The sales even outnumber the number of cars sold in whole 2009.

As the SUV is becoming more and more popular in China, Land Rover, one of the two brands under Jaguar Land Rover, sold 15,899 units in China in the first quarter, increasing by 105% year on year. Among them, Range Rover Evoque played the most important role in pushing up the sales. In the first quarter of 2012, 4,881 units of this model were sold.

In addition, Jaguar, which failed to have good performance in the previous years, made impressive progress in the past quarter. “Jaguar sold 2,098 units in China in the first three months of China, up 156% year on year,” Grace said. The progress was mainly attributed to the brand new Jaguar XF and XJ 3.0, which greatly impressed consumers after being launched. This also proved the success of Jaguar Land Rover’s strategy of “customization for Chinese consumers”. In the first quarter of this year, XJ 3.0 accounts for half of Jaguar cars sold in China.

Though Jaguar had a larger increase rate compared with Land Rover in the first quarter of 2012, its sales is still far behind its fraternal brand. From this March, the promotion tailor made for Jaguar in China was fully started. On March 19, Jaguar announced the start of promotion campaign with the theme of “Jaguar, how alive you are”. Bob Grace thought that this would help to improve the performance of Jaguar in China in 2012.

Actually, Jaguar Land Rover’s impressive performance is not occasional. In the past eight years, it went through dramatic increase in the Chinese market. In 2011, Jaguar Land Rover got the 61% year-on-year growth in sales, higher than the Mercedes Benz and BMW, whose increase was less than 50%. In 2011, Jaguar Land Rover for the first time sold more than 42,000 units in China, becoming a dark horse in the Chinese luxury auto market.

“The fast development of Jaguar Land Rover is also related with the increasing the allocation capacity of the port and the adjustment of components purchasing and supply. But the most important factor is that we produce cars to the taste of Chinese consumers and know where our consumers are. Jaguar Land Rover spends a lot of time in listening to local consumers, knowing their demand and satisfying them,” Bob Grace said.

Accelerated localization

“We attach great importance to the demand of Chinese consumers and combine the local elements with our design, research and development,” said Grace. “Though the Chinese consumers prefer imported cars without any modifications, we still put their demand caused by their nationality into consideration. Jaguar Land Rover is not satisfied with the simple sales pattern of directly importing the newest product from foreign market and selling to the wealthiest consumers in China.”

To make the brand closer to local market becomes the most important task of Bob Grace and his team, who spent most of their energy facilitating the localization of Jaguar Land Rover. “In the past 20 months, we established the state-level sales companies and a great deed we did is to get our products closer to Chinese consumers.” Bob Grace cited Range Rover Evoque, which was just launched at the end of last year. “We found that the potential consumers of Evoque are younger than users of other Land Rover cars. Therefore, we need to find channels that can attract local young consumers to promote our new product.”

Through innovative pre-launching campaigns, Evoque attracted the attention of potential consumers. China has about 500 million netizens. Therefore Jaguar Land Rover made use of social media to promote the new car. The marketing of Evoque proved to be successful. In less than half a year, the company received about 5,000 orders. It is known that Land Rover plans to make the debut of the limited Victoria Beckham edition of Range Rover Evoque in the Beijing Auto Fair this year to extend consumers’ focus on Evoque.

“The promotion campaign is not the only part that Jaguar Land Rover adjusts to local consumers. We plan to localize our products as well. We want to set up a design center in China to participate in the process of product-related decision-making in our British headquarters. Now when the headquarters designs new models, what Chinese consumers like will be put into consideration as well. In China, a new product team has been formed to collect the information about Chinese consumers’ demand and deliver it to the headquarters for analysis. The demand of Chinese market can be reflected in the process of product design,” Grace said.

XJ was previously not quite popular in the Chinese market. The product team mentioned above made thorough investigations, from which they found that Chinese consumers prefer cars with 3.0L emission and 6-cynlinder engine. “The opinions were delivered to the UK headquarters, where relevant changes were made quickly. The new XJ 3.0 proved to be quite popular in China and contributed to one half of the Jaguar cars sold in the first quarter,” said the PR director of Jaguar Land Rover.

Meanwhile, other organizations supporting localization is under construction as well. In 2012, Jaguar Land Rover will set up its third training center and office in Guangzhou while the first two training centers are located in Beijing and Shanghai. In order to improve the after-sale services, the fifth component delivery center has been opened in Chongqing, which will accelerate the circulation period of components. In addition, Jaguar Land Rover will establish two new Land Rover Experience Centers in China to meet the demand of Chinese consumers and to lay a foundation of recruiting more loyal consumers for the good of its long-term development in China.

“The key is to get close to our consumers and provide them with the best services so that they could rely on our products. Chinese consumers have a high frequency in changing cars. We want our consumers to choose our brands again when they decide to buy a new car,” Bob Grace said.

In order to reduce the distance between Jaguar Land Rover and consumers, the luxury auto company is busy recruiting more distributors. Recently, Jaguar Land Rover has appointed Baoxin Auto Group Limited, a leading auto distribution company in China, to set up a franchised 4S store of Jaguar Land Rover in Xi’an. This means that Jaguar Land Rover already has 125 4S stores in China and 86 of them have been put into use. “I am going to join the opening ceremonies of 17 new distribution stores in the next few months,”Bob Grace said.

Abandon the image as a large oil consumer

The engine is getting smaller and smaller, which is the global trend. Jaguar Land Rover announced last year that it invested 355 million pounds in building a new engine plant to product engines whose emission is only 2.0L or smaller.

In China, Jaguar Land Rover might face the stress of the government’s order of saving energy and reducing emission. The new government plan of auto industry in the “12th Five-year Plan”(2011-2015) puts forward the requirement about promoting energy-saving cars and developing new energy autos. By 2015, the energy-saving passenger car’s oil consumption should be lower than 5.9 liters per 100 kilometers. Experts think that the policy is very strict and will greatly affect the enterprises producing cars with large emissions.

However, from the most popular products of Jaguar Land Rover in China, this British company is gradually changing its profile as a big energy consumer. Jaguar XJ is equipped with the 3.0L engine while Range Rover Evoque is with the 2.0L engine, which will be applied to the newly launched Land Rover car.

Jaguar Land Rover reduces the oil consumption not only through reducing the emission but also by lowering the weight of their cars. In the Guangzhou Auto Fair last November, Jaguar Land Rover exhibited its technological advantages in saving energy and protecting environment that were well ahead of the others. Jaguar XJ adopts the aluminum frame with a low weight and superexcellent safety. This car is 150 kilograms lighter than the steel car with the same size while its strength and anti-collision ability are even greater. According to the plan of Jaguar Land Rover, the aluminum body will be used in Land Rover autos in the future.

Range_e, which made its debut in the Guangzhou Auto Fair, was also placed under limelight too. This new model was designed based on the sports version of Range Land. But it is a plugin hybrid and can reduce its emission of carbon dioxide to 89 grams per kilometer and the oil consumption per 100 kilometers is only 3.36L.

In order to make autos depend less on oil, Land Rover, one of the best SUV bands in the world, is planning to launch hybrid and plugin hybrid in China between 2014 and 2015. As a dark horse in the luxury car, Jaguar Land Rover is speeding up on the way of developing in China’s auto market.