Letter from Europe...Jag, Volvo, Rover
Regular readers will have read my previous letter concerning-among other things- my trip to France for the launch of Jaguar's new X type. That was back in May and now, four months later the car is on sale in the United States. To find out more about the cars's prospects I drove to Irvine,CA in another Premier Group automobile- Volvo's highly successful V70 XC AWD. This all wheel drive product from Sweden has taken Marin county by storm, no self-respecting Mum will be seen without it. Not just self-respecting, environmentally minded as well. They need a car for all seasons-to the school, to the office, the beach, the mountains without wallowing in some monstrosity doing 8 miles per gallon. It is rightly synonymous with the highest safety standards and furthermore it is pretty quick as well. I will not be a hypocrite and pretend that I was doing 70 miles per hour all the way from San Francisco to Irvine, let us just say that I kept up with the traffic. It wasn't my fault Officer that it was flowing at 90 most of the way. The 2.4 liter 5 cylinder engine 197 horsepower engine was very quiet and fuel consumption worked out at a very respectable 20.9 per gallon.
I only had one major dislike, something I tend to label the deliberate error as all automakers have at least one, in this instance the rock hard grab handle built into the doors . I bashed my head several times and it was most unpleasant. The Q45 I am driving at present also has them but these are nicely padded. Volvo-please copy. Apart from that at 36 thousand dollars the V70 seems is good value although I am not totally sold on the extras which could add another 4800 dollars to the sticker price. The 125 dollar grocery bag holder cannot possibly cost more than 12 dollar 50 cents to Volvo and I am equally skeptical of the value of the leather package for $1300. Still, that is not to say that once installed these are not pleasant additions to an already fully equipped automobile.
Ford Motor Company, Premier Group's parent certainly knew what it was doing when they created this entity. All the offices are in one brand new, purpose built building so having visited Volvo on the third I walked down to the second to see my old friends at Jaguar. There have been a number of changes, all three British brands ( Jaguar, Aston Martin and Land Rover) now report to the same boss with three Vice Presidents reporting to him. The big surprise to me and probably to all my fellow motoring journalists was the appointment of 37 year old Sue Callaway to head up Jaguar. Sue is a much admired colleague whose articles on the auto industry in Fortune magazine have been compulsory reading for captains of the industry for its fearless comments and observations. When we went on a trip three years ago she was a single journalist, now she is a senior auto executive married to Lance Callaway. (Yes, that Callaway..) Will she make it in the rough and tumble of this very tough industry remains to be seen, I sincerely hope so.
While it was too early in the job to ask Sue for a full interview we did managed to collar newly promoted Simon Sproule-VP of Public Affairs for the "British Group" for his views on X type and his predictions for the industry following the terrorist attacks on September 11. " When the original plans were formulated we were planning to sell 10-12 thousand X types this year and 30-35 thousand next year. World-wide we would be hoping to sell 100 thousand units next year which is taking it beyond what S type is which about 50 thousand. The effect of the events on Sept 11 and the effects of a declining economy will have an impact on the business, how much, nobody can tell at present. The further away we move from Sept 11 people's intention will become clearer. There are a number of paralell with the situation during and after the Gulf War so we are studying the situation accordingly. Right now( Sept 2001) dealers are reporting less traffic, not just for us but across the board. We are looking at incentives like everybody else. X type was launched on August 1 and got off to a good start and we haven't started advertising it yet! There will be a big TV push in October. We have three and a half months of production ordered and sold. That means about 6000 orders in the bank." I suggested that the cars were somewhat late in arriving because Dr Reitzle was not completely happy with the quality. Simon Sproule confirmed that, as he put it, the company was extremely careful to make sure that the cars were in tip-top shape before leaving for the United States. Translated into plain English his expression of "we've taken an approach of a lot slower ramp-up in production to make sure that the cars were perfect for the launch" means that there were some niggling little faults and to avoid costly and embarrassing recalls impatient customers were a lot better than the alternative. Frankly, I don't blame them. Moving on to the subject of diesel cars Simon confirmed that the level of sophistication with European diesel engines is such that an increase in their sale is inevitable although he did point out the necessity of moving pumps away from some of those truly messy, huge truck stops to make it more palatable for main stream consumers. he also confirmed that Jaguar has some diesel engines in the pipeline although he doubted that the American market would be ready for a diesel Jag.
He made an interesting observation about Ford Motor Company's approach to selling luxury cars. Unlike rival brands which stretch the name right across the range from say A class to S class like Mercedes, Ford through the Premium Group have five brands- Land Rover for SUVs, Jaguar for sports cars, Volvo for middle market, Swedish-style with emphasis on your legendary safety-, Lincoln is the American luxury brand and Aston Martin is at the very top to challenge Ferrari at the very top of the automotive tree. Among the British brands there will be 9 cars by the end of the year- 3 sports cars, 3 sedans and three SUVs. Moving on to Formula One Simon assured me that in spite of the paucity of results the company's participation has in fact been helpful in the States. Even though it is very much a minority sport in the United States in his opinion for "luxury cars it is a very smart place to be. Jaguar, BMW and Mercedes customers tend to be affluent, sophisticated, they aspire to the world of F1 because it is glamorous and international. We can use F1 at dealership levels in displays and through merchandising and also talking about technology transfer. The imagery of F1 is very powerful. It is more for association than anything else." A few days after this interview had taken place Eddie Irvine put in one of his finest performances ever by fighting his way into a highly creditable fifth place from way back on the starting grid much to everyone's delight at Jaguar.
The group has very ambitious plans concerning retail. As head honcho Wolfgang Reitzle said at last year's LA Show it is farcical that 50 thousand dollar automobiles should be sold from glorified parking lots. My understanding is that PAG is in the process of designing automotive superstores, facilities where all five brands can be sold from one -if you like-cylindrical building. Bit like a modern airport I should think. Those interested in Volvo would go to that part of the building without bumping into Range Rover salesmen and vice-versa. Behind the scenes of course there would be one center for all the various chores such as accounting which could be done for the whole group. I know that the Premier Group is Ford CEO Jacques Nasser's pride and joy, goodness knows he invested an awful lot of money getting it into shape. Under the stewardship of ace perfectionist Reitzle it is making huge strides. I cannot help wondering whether they might float it on the stock market one day for an awful lot of money just like they did with Visteon? Seems logical to me.