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Market view: why the Jaguar XJ has an uphill battle

Fri, 10 Jul 2009

By Glen Brooks

Motor Industry

10 July 2009 16:11

It’s a sobering thought for Jaguar management that no matter how good the new 2010 XJ is, it’s never going to be a big seller. The global market for large executive saloons was in decline long before the Great Recession appeared, the buyers in this segment increasingly tempted by models as diverse as the BMW X6, Infiniti FX, Cadillac Escalade or Mercedes GL-Class crossovers and SUVs.

The generation that was chauffeured in an S-class or XJ is retiring, with the owner-drivers who succeed them soon to be preferring a Porsche Panamera, Aston Martin Rapide or Audi A7.

That the decision was taken earlier this decade to rebody the X350 XJ rather than authorise a clean-sheet design shows that previous owner Ford saw what was ahead. In 2007, the last full year of a strong global economy, Jaguar built only 10,172 units of its biggest saloon.

In calendar year 2008 – and remember that markets didn’t start slowing until the third quarter – this had fallen to 5912 cars. Underlining just how irrelevant the XJ had become by the end of last year, in the same period VW built 6189 units of the Phaeton, a car that most of us have just about forgotten exists.

So where will the XJ sell most strongly? America is still the world’s largest luxury car market, yet in the first half of 2009 Jag managed to find buyers for only 810 XJs. In the same period, sales of the segment-leading Mercedes S-class and Lexus LS fell by more than 60% to 5036 and 4857 units respectively, destroying much of Daimler and Toyota’s luxury range profit margins in the process.

Consider what the numbers for Jaguar must be like, factor in the constantly seesawing pound-dollar exchange rate and then recall that Jaguar has only a small presence in the big and recovering German and Chinese markets to offset US market losses.

With all that in mind, it’s sadly worth pondering just how the ‘crucial’ new XJ can possibly make decent money for Jaguar.

It’s all a far cry from the heyday when Browns Lane sold around 38,000 XJ models a year back in 1998…

By Glen Brooks