Does Jaguar Face Extinction?

Ford is on the verge of selling Jaguar to Indian company Tata after failing to see a return on its investment after nearly 20 years. What caused the British luxury car maker’s decline?

When the Ford Motor Company acquired Jaguar in 1989, the American giant was aiming for a slice of the lucrative European luxury-car business – with ambitions to snatch sales from the dominant Germans.

Nearly 20 years later, however, Jaguar has yet to post a profit, its sales continue to shrink, and the British brand is about to be offloaded to giant Indian company Tata.

Jaguar has been the weakest link in Ford’s luxury division, the Premier Automotive Group, which includes Land Rover and Volvo. At the heart of both Jaguar’s ambitions and problems has been the X-Type, the company’s entry-level, mid-sized rival for the likes of the BMW 3-Series and Mercedes-Benz C-Class.

The X-Type sedan was launched in 2001 as the crucial part of Ford’s strategy to turn Jaguar into a higher-volume luxury brand. By aiming for a slice of the popular mid-size prestige segment, the X-Type was intended to more than double Jaguar sales to about 200,000 a year.

A promising start saw Jaguar sales break the 100,000 barrier for the first since the company was founded in 1922. However, the sedan’s conservative styling – it looked like a scaled-down S-Type – struggled to attract the younger buyers it was aimed at and Jaguar sales have been in decline ever since.

Jaguar’s cause wasn’t helped by Ford, which wasn’t shy about the X-Type sharing its platform with the humble front-drive Mondeo. Jaguars are traditionally rear-wheel drive, and the presence of some Ford switchgear in the X-Type was also damaging to the car’s image.

The X-Type epitomises Jaguar’s stubborn persistence with traditional design that even cloaks its most technologically advanced flagship, the XJ.

Ian Callum, the designer hired to inject contemporary styling into Jaguar, says the X-Type was the wrong car for its target audience.

“It’s a difficult one the X-Type. It’s certainly not a car I would have designed [for the mid-size luxury market],” says Callum.

“The X-Type was a traditional-looking car for a young market. And let’s say that that balance wasn’t quite correct.

“Younger-minded people and even older people in their 50s don’t want to drive a car that their dad would have driven.”

Jaguar’s Scottish design boss believes there were senior managers within both Ford and Jaguar that didn’t understand the values of the British brand.

“I know Geoff [Lawson], my predecessor, was under pressure to design something that looked quite clearly like a Jaguar, because [Ford] were going into a class [3-Series segment] they hadn’t been in before.

“He was given quite clear instructions at the time that the X-Type must look instantly like a Jaguar. And that’s what they did.”

The X-Type has now been discontinued in North America, contributing to a disappointing 2007 in a crucial market for Jaguar when year-on-year sales dropped by a quarter. In Europe, Jaguar’s 2007 sales fell by a fifth to 33,700.

As Drive reported last year in a world exclusive, Jaguar is considering axing the X-Type from its model line-up.

The new XF – which replaces the S-Type – will become Jaguar’s new volume-selling model, with spin-off variants such as a wagon and coupe (but definitely no convertible) expected down the line.

Callum, however, won’t rule out a new, smaller Jaguar joining a future line-up that he says will always comprise only four or five cars in total.

“I do believe there is a place for small luxury cars in the world,” he says. “But you’ll have to wait and see what we do.

“There’s a place for a smaller [Jaguar] but it must be upmarket. We don’t want to sell cars with cloth seats.”

The next-generation XJ is due next in 2010, but other models – including a much speculated 21st-century version of the legendary E-Type – will be determined by Jaguar’s new Indian owner.