Thursday, Sept. 3, Jaguar revealed that it will significantly reduce prices in an attempt of conquering the middle range of the luxury market. The bold marketing move is perceived as an interesting change of heart from a brand that always transpired glamour and exclusivity.
The explanation leads back to 2008, when Tata Motors bought both Jaguar and Land Rover divisions and started to rethink international positioning, with a special focus on the U.S. market.
"We no longer want to be a high-priced outlier in the luxury market," declares Rob Filipovic, head of product planning for the Jaguar Land Rover in the U.S. "Our pricing has consistently been at the top of the luxury segment."
World-wide, Jaguar's sales have dropped by 9 percent in the last nine years, as opposed to Land Rovers' that more than doubled. A close look at the American market reveals that the premium segment is disputed by a few brands, the German three (Mercedes, Audi and BMW) being the strongest contenders. After seeing that high end customers tend to choose between SUVs or small sedans, Jaguar executives realized they denied the brand half of the market.
The situation is about to take a sharp turn, after the launch of the XE sedan this fall. The car desires to rival directly with BMW 3 Series, the current standard for quality and flagship of luxury car sales in the U.S. The race will be tough, as for each Jaguar, BMW sold nine sedans last year.
A competitive price of under $35,000 and a prestige that is unmistakable British may allure to younger clients that are bored with the omnipresence of German cars.
"We want to make sure we are competing in the heart of the market," Ms. McCullough, Vice President, Marketing, Jaguar Land Rover North America, said. "The XE segment is a critical audience for us."
In a unique marketing move that may write history, Jaguar also announced the release of an S.U.V. at the Frankfurt show. The F-Pace targets a posh clientele that usually chooses brands such as Porsche or others. Price will be revealed in autumn, at the auto show but it is expected to be a surprise.
"It will have all the attributes and performance of the best in that class," Filipovic says. "We are coming in with an extremely strong product in that segment." Quality canons are a priority for the Indian car builder. It promises an aluminum infrastructure that grants reduced weight and increased agility, an improved sound system, standardized chair ventilation, and exquisite detailing.
The price reduction is just a part in a greater client oriented approach. Jaguar is maximizing its warranty to five years or 60,000 miles from four years/50,000 miles and offers free scheduled maintenance.
There is a chance that the two new Jaguars will cannibalize each other, but Tata Motors has the power to take the brand next to Land Rover in a successful race to the podium of sales charts.
