LOS ANGELES - Admitting that it's still on a steep learning curve when it comes to selling entry-level luxury cars, Jaguar Cars Ltd. will halt production of the X-Type for two weeks at the end of February to balance inventories and lagging sales.
The suspension, which Jaguar said will take about 2,500 units out of production, follows a 12.5-day output reduction in the fourth quarter. According to the Automotive News Data Center, X-Type production slowed from 7,801 units in September to 4,814 in December.
Jaguar blames the stoppages on global economic uncertainty. But company officials also acknowledged last week that the automaker has learned painful lessons from its move into the entry-luxury market.
The V-6 sedan, Jaguar's lowest-priced model, is priced from $30,595, including a $645 destination charge, to $39,095.
"We're taking measures to make sure the X-Type does not get into an oversupply situation," said Jaguar spokesman Simon Sproule. "BMW, Audi, Mercedes and Lexus are being very aggressive with their leasing. It's a competitive market, so it behooves us to make sure we don't oversupply our dealers."
Globally, Jaguar sold about 73,600 X-Types in 2002, its first full year on sale in all markets. However, sales in the main markets of Europe and America slowed in the last six months of 2002 to just 27,609, according to the Automotive News Data Center.
When the car was launched, Jaguar had set its hopes on selling 100,000 units annually.
In the United States, Jaguar sold 33,018 X-Types in 2002, which Sproule said "exceeded expectations." But the sales rate has been erratic, driven mostly by advertising and incentives.
In August and December, when the car was backed by retail-theme ads in America, sales were strong. But in October and November, without support, sales slumped.
Sproule admitted that Jaguar has had a sharp learning curve in the different dynamics of the entry-luxury market, compared with the higher strata of consumers who have purchased the XJ, XK and S-Type luxury vehicles in the past. *