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JLR snatches market share from the 'traditional premium' players

Date: 15 June 2016   |   Author:

A 50% growth in year-on-year true fleet sales is impressive, but doing it twice in a row is the declared target for Jaguar Land Rover, as the company seeks to establish itself for the first time as a genuine fleet player.

"We're talking about fleet and business, and for JLR this is a bit of a new topic," admits UK managing director Jeremy Hicks. "We've had massive retail strength, but haven't previously been able to say the same about fleet and business."

But a big investment in expanding the firm's fleet team over the past three years came ahead of the recent product push that has seen the launch of the new Jaguar XE, XF and F-pace, the Land Rover Discovery Sport and revised Range Rover Evoque. All these new models come with the efficient new 2.0-litre diesel engines from the company's plant in Wolverhampton; investment in which, when 2.0-litre petrol engines begin production later this year, will have topped £1bn.

"These engines, along with fantastic design and engineering, have allowed us to enable growth and, for the rational side, fleet managers and decision-makers now know JLR is a powerful alternative to their manufacturer of choice," Jon Wackett, Jaguar Land Rover's general manager, fleet and business sales tells BusinessCar. "We truly have  a proper fit into most companies' choice and policy lists and it allows us to be a very good alternative to the traditional premium cars."

Registrations in what JLR views as core fleet sectors - contract hire and leasing, sub-25 fleets and over 25 fleets - rose by 49.6% last year compared with 2014, with Land Rover registering 14,472 (up 49.8%) and Jaguar 6562 (up 49.2%) units. The target, according to Wackett, is to maintain that level of improvement throughout this year.

For the first quarter of 2016, where Jaguar in particular is benefitting from the XE being all incremental volume at this stage, JLR registrations to the three core fleet sectors was up 84.4%, although that will slide back later in the year to a target of 50% up.

"Volume will keep coming through, though we will see an easing back of growth," says Wackett. "A wise man said to me that these cars will be new cars for three years because that is the length of contracts.
"Desirable vehicles, plus efficient engines and great total cost of ownership equals success," he continues. "People want to walk out of their door and see one of our cars - you want it but it has to be good value."

The brand has pinpointed looking after customers as a key growth objective, both initially and through the service experience.

"Investment into retailers is very important - they will deliver aftersales service and build loyalty into our brand," says Hicks. "Drivers will potentially experience servicing in a Jaguar Land Rover dealership for the first time in their car ownership history, and we would love to think they will have a really positive experience and then relay that in the pub, in meetings, or over the dinner table, to introduce friends, colleagues and relatives to JLR, to buy new and used cars for the first time."

"If you look after customers they become a loyalist and will come back and buy from you," adds Wackett. "If you really look after your customers they become an advocate and recommend you to others. We are trying to make them advocates of the brand."

Investment at dealership level is continuing, with JLR moving to ensure the same dealer runs both brands in each territory. Facilities have also been improved, with, wherever possible, the implementation of drive-through service receptions, coffee areas, workstations and wi-fi, as well as longer opening hours.
But building awareness of the new product line-up is the key focus.

"A lot of people may not even have been in a Jaguar, but they are now appearing in car parks and people may experience an XE or [Land Rover] Discovery Sport for the first time when travelling with colleagues," Wackett concludes. "Some companies have been out there in fleet for 15 or 20 years and have good products in their own right; we aren't there yet - we've got to look after customers and drive familiarity and awareness."

On the way

Jaguar Land Rover is promising to expand its product line-up over the next five years, with new models into areas the company is not currently represented forming part of the planned 50 "product actions" by 2021.

"We have 'white space' opportunity. Other manufacturers say that they enter new segments when they create them, but we have segments that we are not in - segments that are not new to anyone else," explains JLR's UK boss Jeremy Hicks, who declined to elaborate further on when the first evidence of new models will appear.

The 50 product actions include the new 2.0-litre petrol engine, which enters production later this year at the Wolverhampton factory and will be rolled out to several models

Growth in numbers

Jaguar Land Rover is making inroads in the sectors it's competing in, and claimed that for the first quarter of 2016, one in three cars in the segments it defines itself as competing in wore a Land Rover badge.

At a fleet briefing event early this month, JLR released figures of its market share for 2015 and the first quarter of 2016 to illustrate its growth. Referring to the Society of Motor Manufacturers' classification of B, F and K, which is contract hire and leasing, and direct selling to small fleet and large fleet operations, the brand claims its four key fleet models - Jaguar XE and XF, Land Rover Discovery Sport and Range Rover Evoque - are all making market share inroads this year at the expense of, and at a faster rate than, their key rivals.