Automotive News   |   Automotive News Europe   |   Autoweek   |   Automobilwoche

Automotive News China Newsletter
Register our free newsletter, sent each Monday and Thursday

     Automakers   Suppliers   Auto Show   Comment   Car Cutaway   Newsletters   Press Releases   Register for Newsletter
  Contact Us:   Editorial   Advertising   Subscription Information   |   About Us   Media Kit
Home >> Automaker Email this story   Print this story
A Jaguar E-Pace on the production line at the Chery Jaguar Land Rover plant in Changshu, China. JLR's China sales fell more than a third in the nine months through December and have continued to slide
 
Jaguar Land Rover in uphill battle to revive China operations
Bloomberg | 2019/5/17

LONDON -- Jaguar Land Rover is battling a saturated market in China as the automaker tries to steady a struggling sales operation that triggered a $4 billion (27.5 billion yuan, at current exchange rates) writedown in February, CEO Ralf Speth said.

Automakers are "fighting for volume" after the world's biggest automotive market posted its first annual slide in demand in more than two decades, Speth said in an interview Wednesday. That makes it even more vital that JLR establish its products at the top end of the market, he said.

"We want do it in the premium business way," he said. "The market is going down, but last year the premium market was nevertheless stable."

The company is overhauling its Chinese dealer network because it provides insufficient exposure to the country's biggest cities. The February writedown pushed JLR owner Tata Motors to a record loss.

Speth said Wednesday that Tata will provide an update when it reports results Monday, but that there is no quick fix for the issue, and he is not prepared to make unlimited sacrifices to stoke volume.

"Dealer networks don't change at the push of a button," he said on the sidelines of a Financial Times conference in London. "We do not want to push vehicles in the market then have huge stocks that get older and older. We don't run for the sake of running. We want to have profit, not just volume."

JLR's China sales fell more than a third in the nine months through December and have continued to slide, declining 46 percent last month while the country's car retail market as a whole shrank 17 percent. JLR's business in China has been hit because of persistent woes with reliability and dependability.

The company is cutting 5,000 jobs as part of a 2.5 billion-pound ($3.2 billion) savings plan as demand is also hurt by confusion around Brexit and a U.K. clampdown on diesel autos.

Adding to the turmoil, the company is reportedly being targeted for takeover by PSA Group. Speth said he has not spoken with PSA boss Carlos Tavares about any transaction, and cannot confirm whether there have been any discussions between Tata and PSA.

"Car companies always talk about technical things or whatever," he said. "We are talking to everybody. I definitely cannot speak for Tata. I'm a normal employee in this empire and therefore I cannot make a statement."

JLR is also streamlining its commercial policies in China to help compensate for retailers' losses and launching extensive on-site training programs to improve the customer experience.

The sales decline is being exacerbated by the China-U.S. trade war, according to Speth, who said he hoped the "geopolitical issues between America and China can be resolved quickly."

JLR can thrive as a U.K. business with its manufacturing base in the country, including electric vehicles, Speth said. He said measures to secure economies of scale through partnerships with bigger companies may not be worthwhile if they mean surrendering control of products and strategy.

"Being small, being nimble is also an opportunity to be agile," he said. "You have the freedom to do all your own strategy in a fast way."

Related Stories
  • China woes expose lax quality control at JLR
  •     --Published:2019/15/2
     
  • Jaguar Land Rover's China venture expands plant, starts E-Pace output
  •     --Published:2018/29/6
     
  • Jaguar Land Rover preps made-in-China EV
  •     --Published:2018/29/6
     
  • Range Rover launches locally built Velar
  •     --Published:2017/10/9
     
  • Jaguar Land Rover deliveries surge in robust luxury market
  •     --Published:2017/15/8
     
  • Jaguar Land Rover begins output at first overseas engine plant
  •     --Published:2017/25/7
     
  • Jaguar to build E-Pace compact crossover at Chery joint venture plant
  •     --Published:2017/18/7
     
  • Jaguar Land Rover's Latin American chief to run China sales unit
  •     --Published:2017/20/1
     
  • Jaguar Land Rover to expand output at Changshu plant by 70,000 units
  •     --Published:2016/29/11
     
  • Jaguar Land Rover sales surge; Infiniti struggles
  •     --Published:2016/11/10
     
  • Land Rover copycat lawsuit proceeds despite patent cancellation
  •     --Published:2016/24/6
     
  • JLR aims to capitalize on hard lessons learned in China
  •     --Published:2016/17/6
     
  • It's time for Chinese regulators to punish copycat carmakers
  •     --Published:2016/17/6
       
     
     

    Our Newsletter Editions
    Automotive News China produces two email newsletters each week. You can sort your news by the articles highlighted in each of our newsletters here.

    Select your newsletter     

     
     

    Automotive News China
    Room 1303, Building 2, Lane 99, South Hongcao Road,
    Shanghai 200233
    Telephone: 86-139-1851-5816
    Fax: 86-21-6495-0895
     
    Home | Help Center | About Us | Privacy Policy | RSS
    Entire contents © Crain Communications, Inc.
    Use of editorial content without permission is strictly prohibited. All Rights Reserved.
    ICP06057291