Land Rover plans to grow in the United States, but just how that will happen was thrown into doubt two weeks ago.
Land Rover's innovative stand-alone dealerships are a key part of its identity and growth plans. Now it must work out its future with Ford Motor Co.'s Premier Automotive Group.
Nevertheless, Land Rover and Jaguar, an important part of Premier, are a well-matched pair of prestigious brands from Great Britain, say both companies.
'If there were one car that sits on more Jaguar owners' driveways, it would have to be Range Rover,' said Roger Putnam, Jaguar's global sales and marketing chief. 'Land Rovers do something none of the other trucks do - they have that heritage flavor.'
Land Rover gives Premier the missing piece in its luxury puzzle, a full lineup of luxury sport-utilities with a global presence. Land Rovers are sold at about 1,800 dealer points in 125 countries worldwide.
It is too soon for Premier to determine how it will absorb Land Rover dealerships. Ford has not assembled an integration team to oversee the acquisition. Vic Doolan, a former BMW executive, will be instrumental in determining Land Rover's future as executive director for North American marketing and distribution strategy for Premier.
However, Ford CEO Jac Nasser has made it clear Jaguar and Land Rover are well-suited retailing partners. In addition, the Premier group is encouraging consolidation of its Lincoln, Volvo and Jaguar dealerships. The luxury brands will not be housed on the same showroom floor. Instead, Premier foresees separate showrooms under one roof or separate dealerships on a single campus.
The two brands 'fit together in a showroom very well and are complementary within the family of luxury brands,' Nasser said. 'It is not going to be everywhere, but where it is useful, this will strengthen the strategy.'
Land Rover strategy before the Premier announcement called for opening 15 to 20 new Land Rover Centres by the end of 2001, said Mark Schirmer, spokesman for Land Rover of North America Inc.
Land Rover has 120 retail outlets in the United States; 80 are stand-alone Land Rover Centres. The remaining outlets are joined with other high-end brands, including Jaguar.
Ten Land Rover dealerships share space with Jaguar, Schirmer said. About 25 additional Land Rover dealers hold Jaguar franchises but operate the franchises independently.
Land Rover dealers greeted news of Ford's proposed purchase with approval. Ford's careful handling of Jaguar reassures dealers.
'I would hope Ford would manage the Land Rover acquisition in the same fashion they have managed Jaguar,' said Peter Hennessy, owner of two Land Rover stores and one Jaguar dealership in the Atlanta area. 'The talent and capital that Ford has committed to Jaguar is as strong as any top-tier luxury franchise in the world.'
The synergy possible in the Premier group will strengthen dealerships, said Michael Lazarus, executive vice president of Long Island Automotive Group in New York. The group operates one Jaguar, one Volvo and four Land Rover stores, including the largest volume Land Rover dealership in the world. The group sells about 2,000 new Land Rovers annually.
'The concept of a Jaguar store sharing with a Land Rover store makes it more viable and economical,' Lazarus said. 'They are separate brands, and they have to be very distinct. But they share a British heritage. They could share back office functions and service operations. They could share the same piece of property but with separate showrooms.
'Ford can give us more products, faster,' Lazarus said. 'They also have more capital resources to carry us through the tough times.'
Premier planners and dealers must protect the distinct identities of the two brands by maintaining separate showrooms and sales staffs, said Warren Waugh, managing partner of Land Rover Peabody in Peabody, Mass.
'You can't ask a combined sales staff to put on two different hats. It doesn't work. One line of cars will sacrifice sales,' Waugh said. 'You have to be dedicated to Land Rover or dedicated to Jaguar.'
Land Rover dealerships are concentrated in California and the Northeast. The company is trying to fill in 'white spaces' in areas such as the Midwest, Schirmer said. Land Rover began selling in the United States in March 1987.