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JLR aims to capitalize on hard lessons learned in China
Nick Gibbs | 2016/6/17

Jaguar Land Rover sold a record 521,571 vehicles in its fiscal year that ended March 31, with Jaguar accounting for 94,449 sales, a rise of 23 percent on the year before. Jaguar is poised to do even better this year because of the recent arrival of its first crossover, the F-Pace, which the automaker believes will become its all-time top seller. 

JLR sales boss Andy Goss also revealed the changes he made to get his China business back on track. Goss spoke with Automotive News Europe Correspondent Nick Gibbs. 

You introduced the F-Pace this year. Will China be its biggest market? 
China, the U.K., the U.S. -- they are all going to be very close. We've got quite an even footprint. China will have a big increase and will take a lot of product for sure. But the United States is still the largest SUV market in the world, and the car is very well positioned there. 

Industry sales in China have picked up again, but Jaguar Land Rover slumped there last year. What happened? 
BMW created turbulence [from a retail perspective] when they wrote a check for 800 million euros to their franchise network [to compensate overstocked dealers] and effectively supported their network's profitability. That led other networks to ask for the same thing. 

But Land Rover has been phenomenally profitable for our retailers. So by sitting down with them and talking through the future and the products, we settled everybody down. Also, the economy had become a bit weaker and there was a bit of a credit squeeze. 

How did you turn things around in China? 
We localized Range Rover Evoque [production], appealed to a new set of customers, and learned many lessons. We also launched the locally built Land Rover Discovery Sport in November and that has been hugely successful. Now we're on a strong growth path again. 

What happens when you localize? Do the cars become less expensive? 
Prices go down and the retailers start seeing a different type of customer. For a long time, the cars sold themselves, but you have got this expanding middle class that is extremely savvy in terms of expectations. You need to start selling the product benefits, the features and the financial benefits. There was big learning curve for us in 2015 and we are still going through that at the moment. I've been out there 12 times in 12 months now. 

How is car retailing changing in China? 
There's consolidation going on in the retail network. People who are car retailers at heart are really expanding and wanting to create some critical mass. 

We've gone past the stage of people investing for a short period of time. There are huge developments in used vehicle sales, in financial services and we spent a lot of time on technical capability. On that front, JLR is at the forefront of any market globally. 

There is a big move toward digitalization and fragmentation of the media, more so than anywhere in the world. Customers are extremely savvy in that regard and we have to make sure we're engaging with those people who are looking at two phones all the time and absorbing messages in a very different way. 

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