Michigan: As auto-sales growth has slowed this year in the US, the
biggest gainers have been smaller luxury brands with new SUV offerings. Exhibit
A: Jaguar, the elegant British line known traditionally for its sports cars and
sedans.
With the timely addition of its
F-Pace sport utility vehicle as well as its XE compact luxury sedan and clever
marketing initiatives, Tata Motor-owned Jaguar has drawn in more, new and
younger customers.
Sales in October more than tripled,
and for the year, they’ve reached 23,568, up 93%, the most among brands tracked
by Autodata Corp.
Jaguar is hardly alone in cashing in
on the SUV craze. Sister brand Land Rover, which specializes in body-on-frame
luxury utilities, is up 7.8%. Volvo, best known for its XC90 crossover, has
increased sales 20%, according to Wards. Tesla Motors Inc., which added the
Model X electric SUV to its lineup this year, grew about 78% through September,
according to Autodata’s estimate.
Tesla doesn’t release monthly
results.
“The winners you called out, they
all have a truck component to their business,” Mike Jackson, chief executive
officer of dealership owner AutoNation Inc., said last week in an interview.
Those smaller brands with new SUV
models are narrowing the sales gap—at least a little bit—with the top three
brands, Mercedes-Benz, BMW and Toyota Motor Corp.’s Lexus, which have all
contracted this year.
“If you take the Germans, at the end
of the day they were car companies,” said Jackson, a former sales executive
with Mercedes-Benz USA. They’ve reacted as best they can to give consumers the
SUVs that they want, but they also “need to reduce car production—and that’s
tough.”
Sales of Daimler AG’s Mercedes
luxury vehicles—excluding work trucks and Smart cars—slipped 0.4% through
October to 277,863—expanding its lead over Lexus, which slid 4.7% to 260,996.
BMW AG’s namesake brand declined 9% to 254,150.
Last month, with two fewer selling
days than October 2015, BMW sales dropped 18%, Lexus slid 6.2% and Mercedes
declined just 1%. BMW’s results exclude the company’s Mini line.
Despite the setbacks, those brands
remain far bigger than Jaguar and Land Rover, which together may top 100,000 US
sales this year for the first time since 2002.
Concerns that demand in the US has
peaked have been weighing on auto stocks around the world. But Tata Motors
Ltd., which bought Jaguar and Land Rover from Ford Motor Co. in 2008, is
tearing it up. Even with turbulence at the parent Tata Group, the automaker’s
shares are up 36% this year through Tuesday. Most global automaker stocks are
down, except for SAIC, the Chinese partner of companies such as GM and
Volkswagen.
Hands-off approach
Jaguar Land Rover is the heart of
Mumbai-based Tata Motors, providing 82% of its sales and 86% of operating
income. Tata, famous for its super-cheap Nano car, has mostly left the
luxury-vehicle business in the hands of industry veterans and given them tremendous
support, said Joe Eberhardt, head of Jaguar Land Rover’s North American
operations.
“They’ve been great stewards of the
company of the brands,” he said. “They understand the importance of brands, and
they have let the management of Jaguar Land Rover do what’s needed to compete
in the market.”
In addition to expanding the product
line—more announcements are coming, Eberhardt said—Jaguar has gone after new
customers with creative marketing. Its villain-themed “Good to Be Bad” ads have
evolved into a British intelligence motif with the latest offering, which
features physicist Stephen Hawking.
The brand has also won over younger
customers through its art of performance campaign, Eberhardt said, which puts
potential customers into 2-minute action-film videos they can share online. 90%
of XE and F-Pace buyers are new to the brand, which now has 12% of customers
under 35.
“They don’t want to be talked to or
communicated to,” he said. “They want to be a part of the experience.