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How Jaguar/Land Rover turned the corner

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The new Range Rover Evoque will reportedly have a nine-speed automatic transmission.

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The new Range Rover Evoque will reportedly have a nine-speed automatic transmission.

Tip your hat to Tata. The Indian conglomerate that bought Jaguar and Land Rover from Ford in 2008 has turned out to be the best owner the British marques ever had.

While other luxury brands changed hands before and during the Great Recession -- most notably Hummer, Saab, Aston Martin and Volvo -- and stumbled under new ownership, Jaguar Land Rover is flourishing. But challenges lie ahead.

In the five years since the Tata Group bought them from Ford, Jaguar and Land Rover have aggressively adopted fuel-efficient new drivetrains, with more to come. The brands' styling have also been energized, as JLR's design teams shook things up with fresh styling.

Land Rover's case was especially dire. In 2008, the SUV-only brand appeared to be on a fast track to extinction.

JLR and Tata turned that around with the Evoque, the first vehicle largely developed under the new management. The small, fuel-efficient Evoque redefined the luxury SUV, won awards and fueled a sales surge. JLR dealers made a record 357,773 sales in 2012, the Evoque's first full year on the market.

"They've managed to take a brand that was three-quarters of the way around the bend to irrelevancy and make it something to be benchmarked for style, technology and luxury," said Edmunds.com senior analyst Bill Visnic.

Equally important, Tata listened to the people who sell Jaguars and Land Rovers. Ratan Tata, the company's recently retired chairman, toured American dealerships and asked what they needed to compete with BMW and Mercedes. The folks who sell the cars and SUVs begged for fuel-efficient drivetrains and all-wheel-drive cars. Without them, Jaguar was a marginal player, shut out of the segments that account for 93 per cent of U.S. luxury sales.

Just two years later, every Jaguar sedan offers all-wheel-drive and either a four- or six-cylinder engine is available in nearly every model JLR sells.

The results speak for themselves. JLR's U.S. sales are up 13 per cent this year. JLR's pre-tax profit rose 27 per cent last year and should be higher this year.

JLR's next big move comes this fall, when the little Jaguar F-type roadster arrives. Priced, sized and powered to compete with such sports cars as the Porsche Boxster and Chevrolet Corvette, the F-type was developed to attract new buyers and restore the brand's credentials with enthusiasts.

Even quality -- long their weakness -- is improving. J.D. Power rated Jaguar No. 2 in initial quality last year. Land Rover still scores poorly.

JLR executives say Tata has reinvested profits in new products and plants, but can they keep up with competitors who sell two or three times as many vehicles?

Both Jaguar and Land Rover still benefit from engines and platforms developed when the brands were part of Ford's global research and development system. It's building a plant in England to produce new fuel-efficient engines, beginning in 2015 or 2016. It will be a huge victory for Tata if the engines can compete with the best from global luxury brands.

After that comes a pair of even taller tasks: developing new vehicle platforms and a compact sedan that can compete with the BMW 3 series, Cadillac ATS and Mercedes-Benz C-class. Every global luxury brand needs to be in that hot-selling segment.

Whether JLR delivers on those metrics could determine if the first five years under Tata were the beginning of a golden age, or a brief moment in the sun.

-- Detroit Free Press

Republished from the Winnipeg Free Press print edition July 19, 2013 A1

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