When asked how the ‘modern luxury strategy’ works for fleet and business customers, Andrew Jago says: “You may recall back in January 2022, we moved our key account, public sector and salary sacrifice business to a direct sale model. That’s almost two years ahead of migration to agency for our other sales channels. So, we’re already in that process now. 

“One of the most significant changes when we did that, bearing in mind this is all centrally generated business – not business generated by our retailers – was the implementation of a localisation strategy. Clients now have their vehicles delivered through our nationwide network of 47 fleet and business centres – representing a third of our network. 

“Taking delivery of a new car is a key moment of truth for our clients, and we want them to benefit from a comprehensive handover experience, rather than just having the vehicle delivered to their home or place of work, or from a retailer that might be located several hundred miles away. 

“We also want to make sure that those drivers get the full brand experience. We’re delivering healthy volumes through this channel, now. Although we’ve had some lead time issues to manage, these are all-new orders generated since January 2022. What we’ve seen through this localisation strategy is client satisfaction scores that are over 40% higher when their handover takes place at a retailer instead of their home or place of work. Clients really value the physical brand touchpoint and feeling like they’re not just a commodity. They’re being treated as the high-net-worth influential clients that they are. Anyone who has chosen to take our product on salary sacrifice, or user-chooser, as a company owner has made a discretionary decision to take our product and they expect and deserve the full brand experience. They perhaps felt in the past that they didn’t feel particularly valued. 

“We expect our retailers to be at the front of the brand experience and deliver the best level of service that meets and exceeds the expectations of our clients. Not just using ‘modern luxury’ as a throwaway term, these actions have fundamentally changed our approach to how we engage with these end users and make them feel special.” 

In the digital space, Jago tells us they’re bringing contract hire online. He says: “We’ve launched with a minimum viable product, so clients can configure their vehicle, and generate an indicative contract hire quote. 

“Right now, it’s referring that quote back to a retailer – but by the end of the year, clients will have the ability to complete the full transaction end-to-end online. So, you’ll be able to configure a vehicle, set your profile on contract hire to whatever mileage works for you with mileage and term, complete the finance application online and then nominate the retailer that you’d like the vehicle delivered to – without touching the retailer at all if that’s how clients would rather engage. Conversely you could go to the retailer, agree your specification, and then do the rest online. Clients can engage with us on their terms through an omni-channel, fully integrated system that will allow our customers to work with us on their terms. This will be very powerful in the SME space.”

We go on to discuss the market, and it appears that Jago’s prediction last year, that demand in the private channels would soften, with robust growth in the true fleet channels was correct. He says: “The first six-months of registration data supports that. I think we could see the order take with interest rates increasing, that private demand was going to quickly soften contrasting with greater certainty in terms of BIK outlook and, in our case very strong residual values, which are helping to maintain competitive rental values in contract hire. 

“We’re seeing very strong demand in the fleet and business channels across the JLR portfolio. We’re performing ahead of the market, with growth of 23% across all sales channels in the first six months. We entered the year with order banks at 50% of our full-year sales plan, with improved supply enabling us to prioritise deliveries to our clients. Fleet and business demand is extremely robust, with order banks currently over 60% of our full-year plan. 

“We’re experiencing particularly high demand for all plug-in models, particularly following the announcement of our 24 model year enhancements – with many of those attracting lower BIK on our electrified hybrid variants. So, for the Range Rover and Range Rover Sport, we’re positioned at 5% BIK for entry-level model and then 8% on the higher grades. They’ve now been recertified at 5% across the board. That is increasing our mix in the boardroom, where that 3% benefit flows through to a lower BIK. 

“We’ve seen the same across the F-Pace and Range Rover Velar as well, now positioned at 8% where previously some variants were 12%. Jaguar I-Pace has also had its mid-cycle refresh, further stimulating demand. In terms of the wider market, true fleet accounts for three of every four BEV sales so far this year – very much driven by salary sacrifice and user-choosers; and that’s very much the core market for I-Pace as well – we’re very much in-line with that trend. 

“We are continuing to experience high demand across the Range Rover portfolio – Range Rover, Range Rover Sport, also Velar and Evoque are staple fleet products for
us – they’re highly appealing products for user-choosers. 

“Our electrification plans for all other nameplates are on track; so we’ve already announced that from the end of next year, we will introduce Range Rover with BEV capability, closely followed by Range Rover Sport, then our first of three new Jaguars from 2025. Over the following years, we will be launching BEV versions of all other collections, including Discovery and Defender, and by 2030 every nameplate will have BEV variants – regardless of whether the government changes their very challenging 2030 deadline, which is publicly what we’re committed to. There is obviously some speculation that 2030 might be extended, but regardless we will be ready. 

“Jaguar continues to offer a strong proposition in fleet and business. I-Pace BEV and F-Pace hybrid are very well established in this space, with BIK at 2% and 8% respectively. As we plan the transition to the new Jaguars, I think it’s important to note that we already have a deep understanding of our clients’ requirements at board level, where we already transact at price points close to what is intended for Jaguar. So, it’s not going to be an entirely new world for us; I’m entirely comfortable with the positioning and our volume aspirations for those products. 

“I-Pace has already been on sale for five years, and I asked some of our leasing companies to share their mileage return data, which highlights several examples that have exceeded 100,000 miles at the end of contract – which is really demonstrating real-world usability and durability, and increasingly we’re seeing 30,000-mile annual contracts. 

“So, again, that’s showing there are customers that access infrastructure at their home, office and public charging to do significant mileage in these products. While I-Pace has had its mid-life refresh, it’s product attributes remain highly competitive, so in terms of range, charge time and performance, we sit right up there with the top third of the adjacent competitors, so we’re keeping pace with the market. From the point of view of the product itself, it’s still a very strong proposition for our clients.”