More product. That summarizes what Jaguar's 178 U.S. dealers need from the carmaker, said Jack TerHar, chairman of the Jaguar Business Operations Council.
The all-new Jaguar XJ sedan is a step in the right direction. After the car's U.S. launch was delayed about six months, the flagship XJ sold well in the last half of 2010. With a full year of XJ sales to look forward to, Jaguar dealers should do better in 2011, said TerHar whose Sill-TerHar Motors Inc. owns a Jaguar store in suburban Denver.
But new product can't come soon enough, he said. Dealers are clamoring for a small crossover, a smaller sedan and all-wheel-drive powertrains. Without offerings in these volume segments, new-vehicle sales will continue to be constrained, TerHar said. Jaguar's owner, Tata Motors Ltd., promises help on those fronts, but no firm commitment has been made, he said. Tata Motors bought Jaguar and Land Rover from Ford Motor Co. in June 2008 for $2.3 billion.
Fortunately, about three-quarters of Jaguar dealers also own a Land Rover store, TerHar said. Land Rover sales are doing well and providing much needed sales and service until product reinforcements arrive at Jaguar, he said.
Meanwhile, Jaguar dealers are heavily reliant on used-car sales and are mining Jaguar's revamped Web operations for buyers, TerHar said.
He spoke with Staff Reporter David Barkholz.
Q: Jaguar introduced the new XJ last year. How did it go?
A: I think you'd have to consider 2010 a success with the new XJ. Of course, it was delayed a few months. Where it was supposed to be out the first part of 2010, it came out midyear. That probably created the most challenges for the dealers.
Anytime you have a new product, you're excited to get it and you want to get it as soon as possible. There was some hand-holding on customers. There were a lot of retail orders in advance and there were some delays on those orders. But it's really no different than other manufacturers. Most have been late with their products the past few years.
How has the XJ been received?
It's been excellent. Whatever you've read in the press has been extremely positive about the XJ. My wife's driving one. I absolutely love the car.
How important is the XJ to the future of Jaguar?
For the next couple of years, it's going to be about 40 percent of our sales. It's the flagship.
The Jaguar lineup doesn't have much breadth. What else do you need?
We obviously need some things that fall into the segments with more volume. If I had a wish list, it would be for a small, four-door sedan and a small crossover.
Will that happen?
There's been a lot of discussion by management about those two products coming.
When do you expect them?
Don't really know. They have not told us a time frame as of yet. There's been discussion from upper management that we need them, but there really hasn't been a commitment that the cars are coming.
Why are products in those segments so important?
The Jaguar dealer's volume is not large. Our top dealers in the country are selling 350 cars a year. To have a good volumes and service business, you have to start them on the smaller cars and watch them grow through your other product lines. It's really nice to bring them into the family young and be able to move them up to fit their needs.
You don't have any all-wheel-drive vehicles either.
It pretty much puts about a third of our dealers out of business during the winter. In the rear-wheel-drive segments where we compete, we do well. The XF, which is the 5-series size, we control 40 percent of the segment in the rear-wheel drive. We do well in the segments we compete in. But not having all-wheel drive, as most of our competitors do, is certainly something we've asked for and we desire.
Jaguar sold only about 13,000 new vehicles in the United States last year. How are you surviving on that kind of volume?
Luckily, the vast majority of Jaguar dealers have a Land Rover franchise as well. About 75 percent of Jaguar dealers are in that category. And those dealers are doing well because Land Rover is doing very well. The Jaguar stand-alone dealers certainly are having to fight very, very hard to survive.
How much contact do dealers have with the factory?
I've never been associated with a brand that is in more communication with its dealer group. They do two grass-roots meetings tours a year. They do the NADA. We get updates from Richard Beattie [Jaguar North America's executive vice president of marketing and sales] on a regular basis, letting us know what's going on in the company.
Will 2011 be a better year than 2010?
I would hope it will be. Just the total luxury segment and total industry sales should get better throughout this year. And we will have the XJ full year rather than six months last year.