MONTREAL -- Land Rover faces an uphill battle.
But Land Rover still plans to expand its lineup and double US sales within the next few years. The automaker also will court customers other than young professionals and academic types.
"To grow our business, we can't just rely on renewals from our owner body," said Richard Beattie, executive vice president of sales and marketing for Jaguar and Land Rover North America. "We absolutely have to have conquest sales."
In 2003, Land Rover sold 39,035 units in the United States, down 4.8 percent from 2002. Through August, Land Rover sales were off 15.4 percent from last year, mostly because of the decline in Discovery production.
The LR3 will replace the Discovery in November. Land Rover dropped the Discovery name in North America and replaced it with LR3. Land Rover wants LR3 sales to be about 27,000 annually in the US. In 2003, Land Rover sold 17,420 Discoverys.
The LR3 is the first vehicle developed by Land Rover since it was acquired by Ford Motor Co. About the only parts shared with other Ford brands are door latches borrowed from the European Ford Focus. And while the LR3's 4.4-liter engine is derived from Jaguar's 4.2-liter engine, the company has spent $13 million in modifications to make it off-road ready.
An SUV code-named the Range Rover Sport based on the LR3 platform is planned for 2005. The LR3 and Range Rover Sport are aimed at Lexus GX 470 and BMW X5 owners, Beattie said.
The biggest changes could be below the LR3. Land Rover likely will place two SUVs where the Discovery was once positioned.
Although Land Rover officials declined to confirm the plan, sources say the Freelander likely would move up in size and capability in 2006.
Also, the rugged Defender will be based on the LR3 platform and return as a bare-bones SUV in 2007.
The weak dollar has hurt Land Rover. Its prices are based largely on the British pound. In early 2002, it took $1.40 to buy one pound. Now it's $1.80. The Freelander, which starts at $25,995 in the US, has been hit particularly hard, Beattie said.
Land Rover sold 4,069 Freelanders through August, down 38.5 percent from the year-ago period.
No $25,000 Land Rovers
Beattie says it's impossible to get a Land Rover vehicle for $25,000.
"At that price point, you need real volume to make money on it, and we're a niche player. It doesn't make business sense," Beattie said at the press launch of the LR3 here.
To Beattie, the choice is clear: Land Rover can put the redesigned Freelander on a more expensive platform and raise the price, or it shouldn't bother.
Whether the next Freelander borrows from a scaled-down version of the LR3 architecture or moves to a car-based sport wagon is undecided. But Beattie added that Land Rover will not settle for badge engineering.
To further broaden its lineup, Land Rover also is playing with the other end of the pricing scale, Beattie said.
"Range Rover is the pinnacle of our lineup, but there is every reason we could step up and do a run of 50 absolutely spectacular vehicles at $200,000 apiece," Beattie said. "But we'd have to be careful. Excessive vehicles as fashion statements come and go."