In an overall U.S. light-truck market that rose 2.4 percent last year, the British luxury sport-utility maker was off 7.6 percent, trimming its already-inconsequential share by a tenth of a point, to 0.3 percent.
This year Land Rover sales are on pace to fall another 12 percent.
Parent Ford Motor Co. has drawn the line. Ford, which acquired the British company from BMW AG in May 2000, has ordered Land Rover nearly to double its U.S. sales next year and to replace its entire lineup over the next five years.
"It's time for Land Rover to settle down and get some consistency," Land Rover North America CEO Howard Mosher said here at the press introduction for the Freelander, the company's smallest and least expensive truck. "For the past 3½ years we've been in an almost constant state of flux as a result of what was going on with the BMW organization."
With the Freelander, priced at $25,600, Ford expects Land Rover sales to grow by about 75 percent in 2002 to nearly 50,000 units. Last year sales were 27,148. Mosher says he recognizes the high expectations on Land Rover to succeed but notes Ford is willing to make investments in the brand to help its growth.
Riding piggyback"What Ford will do for us is make sure we're dealing with quality suppliers that can be flexible enough to respond to our volume needs," Mosher said. "The suppliers can afford to make the investment because we'll be piggybacking a significant investment that Ford will have made for other products they made."
On Sept. 1, Ford combined the three British brands within its Premier Automotive Group. The three - Jaguar, Aston Martin and Land Rover - will share services such as human resources, finance, information technology and dealer development. The president of the group is Mike O'Driscoll, former head of Jaguar North America.
Mosher said the move will force the three companies to evaluate each other's back-office resources to become more efficient. Cost-saving benefits, he said, probably will come in the next 12 to 24 months.
Todd Turner, principal of Car Concepts marketing consultants in Thousand Oaks, Calif., says the marque has been held back by pricing and its poor reputation for quality.
"When the market conditions are favorable to the market that you're in and you're not gaining market share, there's something wrong," he said.
"First of all, Land Rover is perceived as being much more expensive than it actually is. That perception, plus Land Rover's quality scores, have hurt the brand."
With the Freelander, Land Rover is trying to become more attainable. Its entry price point now is nearly $8,000 less than it previously was with the Discovery II.
But Land Rover has far to go to improve quality. On the last J.D. Power Initial Quality Survey, a copy of which was obtained by Automotive News, Land Rover ranked 34th out of 37 brands, with a reported 207 problems per 100 vehicles sold. The industry average was 147.
Power does not release quality survey scores for companies falling below the average.
Mosher acknowledges the company is under pressure from Ford to raise quality standards.
"We are a premium sport-utility manufacturer. We operate in the premium segments of the marketplace. We can't on the one hand say that we're premium, charge premium prices and not deliver superior quality, reliability and durability," he said.
"There is pressure on us. We know there's always going to be room for improvement. And, right now, there's lots of room for improvement."
Plans changing handsLand Rover's plans to replace its entire lineup within five years came from the two-year stint of BMW ownership, said Paul Farraiolo, Land Rover general manager of product planning for North America. Many of the plans for North America were adopted by Ford and kept on the same time frame, he said.
The major change in product so far has come from the supply chain. To adapt the Freelander for the North American market, 70 percent of the parts are new. Farraiolo says it will take years for Land Rover to adopt mostly Ford suppliers, but the change already has helped the brand.
"Parts like fuel pumps and electronic systems - who cares where that comes from?" Farraiolo said. "That frees up money for aspects that will support the brand."
Protecting the brand to maintain Land Rover's distinct personality, Farraiolo said, is Ford's No. 1 priority.
"Whatever we need to develop to protect the brand, Ford is letting us do."
It is important that Land Rover take advantage of Ford's supply chain, Turner said.
For example, he said, the company doesn't have to look far to find engines that might be attractive to its vehicles. While Ford may not have engines with high enough levels of refinement for the luxury sport-utility maker, he said, Volvo may have attractive powertrain offerings in the future.
Land Rover also will benefit from processes that Ford has undertaken with its other brands, Farraiolo said.
"Jaguar taught us how to turn a British factory into a high-quality factory," he said. "They did it in 10 years. The only difference for Land Rover is that they'll do it in less time."