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SUMMARY
This report identifies Jaguar Land Rover Automotive Ltd. (JLR) as a profitable designer and manufacturer of mid/highend sports saloons and SUVs. After recording losses for many consecutive years, it has seen a huge improvement in
general performance since acquisition by Tata Group of India, recently taking a profit in excess of 1.5bn in FY12 (1).
It faces stiff competition from German firms such as Mercedes Benz and BMW, who operate in a similar sector, both
achieving 285% of JLRs unit sales for yearend 2011 (2) (3).
A SWOT analysis (Table 1) identifies a number of points referenced further on to recommend 3 major strategies JLR
could employ to maintain its record performance.
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Strengths
Weaknesses
Opportunities
Threats
Consumers
becoming
more
environmentally
conscious, loan of 340m
secured to conduct R&D
(8)
INTRODUCTION
This report shall briefly analyse the market position and performance of Jaguar Land Rover Automotive Ltd. (JLR),
owned by Tata Motors Ltd., a subsidiary of Tata group conglomerate (13). It should also present 3 key strategies to
achieve the companys objectives in the future. Distinctions between Land Rover and Jaguar Cars (the main 2
subsidiaries of JLR) will be made where appropriate.
PRODUCTS
OF JAGUAR CARS
Jaguar Cars, founded in 1922, is one of the worlds
premier manufacturers of luxury saloons and sports
cars, such as their latest car: the F-Type (Figure 1), to go
on sale mid-2013 (14). Racing variants of most models
are available, e.g. the XKR-S, allowing access to the
lucrative performance car market with a sale price of
>79,995 depending on configuration (15).
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OF LAND ROVER
The Land Rover brand (which became a business entity in 1970) has long held a reputation for producing rugged and
dependable off-road vehicles, such as the highly versatile Defender (Figure 2) (17). However, starting with the release
of the Range Rover in 1970 they have expanded into the luxury SUV market (Figure 3), with the comprehensive off-road
ability being an order winner to many despite it being unnecessary in most cases (18) (17).
Company
Sales Index
(JLR=100)
Mercedes
Benz
1,380,000 (2)
285
BMW
1,380,000 (3)
285
Audi
1,370,000 (22)
282
JLR
485,000 (23)
100
Volvo
449,000 (24)
92.6
Porsche
119,000 (25)
24.5
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Since acquisition by Tata Motors Ltd. In 2008, JLR has been able to take advantage of the $77.7bn capital
reserves of Tata Group, as of March 2012 (26). Confidence in the JLR brands led to a doubling of [the
substantial initial] investment to $1.5billion by Tata Motors Ltd. In February 2012, to finance development of
new models and accelerate expansion into developing overseas markets, e.g. the BRIC economies (4). This has
led to greatly increased business performance, see Figure 4.
The critically and commercially successful Range Rover Evoque (Figure 3), released 2011, has bolstered brand
recognition and proved to be the driving force behind the 33% Land Rover sales volume increase, see Figure 5.
Railhead terminal at Castle Bromwich plant near Birmingham provides a direct, high capacity link to
Southampton Docks, facilitating rapid delivery of high volumes of units to overseas customers, saving 60
million lorry miles per year (9).
400000000
300000000
Net Profit,
200000000
100000000
0
-1E+08
2007
2008
2009
2010
2011
2012
-2E+08
-3E+08
-4E+08
Figure 4: JLR Net Profit, '07-'12 (5)
FY'11
FY'12
Freelander
Defender
Range Rover
Discovery
Other
Company
Mercedes
Benz
177,000
BMW
146,000
JLR
73,000
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14
12
10
8
6
4
2
0
99
00
02
03
04
05
06
07
08
09
10
11
12
Year
Figure 6: Real Chinese GDP Growth, '99 - '12 (27)
Exploit shift in consumer values towards eco-friendly cars, a sector which is likely to dominate the automotive
industry in the future as fossil fuel reserves are depleted. The European Investment Bank granted a loan of
340m to fund R&D to tackle this issue in their products (8).
A favourable exchange environment has increased product demand and revenue (up 37% from FY11) (7)
(10). This is an opportunity for JLR to increase its foreign market share.
06
07
08
09
10
11
12
Year
Figure 7: Petrol Prices, '02 - '12 (8)
Country
Employees in
union, %
UK
27
Germany
19
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3 STRATEGIC RECOMMENDATIONS
CONTINUE EXPANSION INTO EMERGING ECONOMIES
It is imperative that JLR treats growth in the BRIC
economies as an opportunity, or its competitors will
swiftly establish a dominant market position. The 2012
PPP with Chery Automobile (Figure 8) (a Chinese state
owned corporation) is an effective implementation of this
strategy (29). Circumvention of state protectionist policies
such as the large import tariff on foreign vehicles of at
least 25% (+17% VAT) depending on engine size is now
possible (27). The powerful engines present in most JLR
models may have otherwise taken prices above
competitive levels.
There is potential to utilise Tata Motors Ltd.s established
distribution channels within India, which should be utilised
should rapid expansion into India be deemed prudent,
likely as a reaction to movement by a competitor.
GLOSSARY OF TERMS
A favourable
exchange
environment
BRIC Economies
Acronym for the emerging economies of Brazil, Russia, India and China
Conglomerate
Differentiator
See USP
Market Pioneer
Monopoly
Company that takes the risk of being first to introduce a product into a market or sector
Definition of monopoly: A situation in which a single company owns all or nearly all of the
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Opportunity Cost
Order Winner
The feature or selling point that makes a consumer choose a given firm's product over a
competitors
PED ratio
PPP
Productive
Efficiency
Protectionist
Policies
When a government legislates against foreign firms to protect domestic industries. Import
tariffs are an example.
Sector
A distinct subset of a market, society, industry, or economy, whose components share similar
characteristics
Supernormal
Profit
Abnormal profit, also referred to as supernormal profit, is an economic term of profit exceeding
the normal profit
SWOT Analysis
Situation analysis in which internal strengths and weaknesses of an organization, and external
opportunities and threats faced by it are closely examined to chart a strategy. SWOT stands for
strengths, weaknesses, opportunities, and threats.
USP
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