COVENTRY, England - Nick Scheele says Jaguar and Land Rover must cut $1,075 in development and manufacturing costs per car to be competitive with BMW and Mercedes-Benz.
"We're looking at the whole (Jaguar and Land Rover) supply chain," said Scheele, Ford Motor Co. COO.
"There are lots of things you can do."
Jaguar and Land Rover are the two English volume brands in Ford's Premier Automotive Group. Aston Martin and Volvo have lower volume.
Scheele was visiting Jaguar for the first time since he left the chairmanship of the company in 1999 to head Ford of Europe.
Jaguar and Land Rover are looking to save money by buying items such as in-car navigation systems and sound systems from common suppliers, said Bob Dover, who heads the British Premier Automotive Group brands.
By concentrating buying power, "we'll get the suppliers' A team working on it," said Dover, who was leading Scheele on a tour of Land Rover and Jaguar.
Further into the future, Land Rover will move from the BMW powertrains that dominate its lineup to powertrains from Jaguar or other Ford-owned sources.
Ford wants to achieve the same economies of scale as BMW and Mercedes-Benz, each of which makes about 1 million units annually. Jaguar and Land Rover together make less than half that number.
Scheele is examining other aspects of Premier Automotive Group operations, including Jaguar's Formula One team. "It is not doing for the image what we had hoped," he said.
Scheele asked Richard Parry-Jones, Ford's product development chief, to take charge of the Jaguar team.
Scheele told Parry-Jones: "You've got 12 weeks to tell me what we need to do to become podium material."
Parry-Jones' report is due in about two weeks.
Jaguar spends more than $98 million a year on Formula One, but its team has not been successful against the top teams such as Ferrari, BMW-Williams and McLaren-Mercedes-Benz or even second-tier teams powered by Renault, Honda and Toyota engines.
Ferrari's estimated Formula One budget is $196 million.
But there is no question of Jaguar leaving Formula One, Scheele said.
Scheele reiterated that Jaguar's decision to suspend development of the F-Type sports car is temporary.
Jaguar will instead concentrate on luxury sedans and "getting our base models reviewed and refreshed at a cadence that's appropriate for the business," he said.
Another reason to postpone the F-Type is that Jaguar "desperately needs" a diesel for the X-Type, Scheele said.
Sources say Jaguar will offer more than one diesel engine. Jaguar will rely on engineering from the Ford research center in Aachen, Germany, and on its new diesel manufacturing center at Dagenham, England, for the engines. Scheele was in Coventry, England, conducting product reviews at Jaguar's Whitley Engineering Center. He also visited the Land Rover factory in nearby Solihull.
Premier Automotive Group will not change significantly because Wolfgang Reitzle left the chairmanship for a job outside the auto industry, Scheele said.
Mark Fields, who was Mazda CEO, takes over the top Premier job. Fields will work in London.