When the topic is luxury brands, Jaguar Land Rover North America CEO Andy Goss wants Jaguar to be mentioned in the same sentence as BMW, Mercedes-Benz, Audi and Lexus.
Goss, 55, says Land Rover is in that league in terms of prestige and awareness. And he says Jaguar's image problem in the United States can be remedied with a marketing offensive.
Goss, who became CEO in May 2011, had been head of Porsche Cars Great Britain. He spoke last month at Jaguar Land Rover North America headquarters in Mahwah, N.J., with Staff Reporter Diana T. Kurylko.
Q: What is your sales forecast for the industry and for Jaguar Land Rover in the United States in 2013?
A: With the industry, we will go with the forecasts of 15.3 million and certainly it feels pretty buoyant. On Land Rover, we can sell anything they can make -- both Land Rover and Range Rover [vehicles] -- particularly Range Rover. This year our sales numbers will be affected by supply, not demand. We have thousands of customers more than we have supply. We wish we had more but it is not a bad position to be in.
On the Jaguar side, this is our big year. All of the things we wanted and all of the things that should have been there for so many years are now there. May 20 is the launch date of F-Type. Now we have to gather some momentum with Jaguar.
Considering that the F-Type sports car will be a niche vehicle, how can you achieve that?
The F-Type and the XJR 550-hp sedan and XKR GT, with 550 hp, that we showed at the New York auto show [in March] are halo vehicles to push our image. The F-Type is affordable with a base price of $69,895, including shipping. But with limited production it won't be a big seller.
We have the rational cars, with four- and six-cylinder engines and all-wheel drive, to push sales. This is a year where there has to be material change.
How much will Jaguar and Land Rover sales rise this year?
They will both be up by double digits because we are going into segments that we were not in before. Jaguar will be up a bigger percentage than Land Rover. If Land Rover had perfect supply it would be a tough call between the two but that is not going to happen.
What makes the F-Type a worthy competitor?
It is an out-and-out hard-nosed British sports car. If you put it against the established German brands that have been there for 50 years, there is nothing to be ashamed about. What's more important is F-Type is more than a car -- it is an image changer.
We have to move the Jaguar brand image forward. Cars that appeal to the head do not change the brand image. Schoolboys do not put pictures of all-wheel drive on their bedroom walls. They put up pictures of sports cars. The F-Type will appeal to both genders and a younger customer -- 91 percent of the more than 50,000 hand-raisers are new to Jaguar. That is more than Range Rover achieved with the Evoque.
How many F-Types will you sell this year?
We take 50 percent of the worldwide sales. Worldwide supply will be more than 10,000 vehicles when we are in full production.
How many do you expect to sell in the United States in a full year?
We will be expected to sell 400 to 500 cars per month. We have the first three months taken care of.
What is your marketing strategy?
It is not just product that will change Jaguar. We understand that we have to put a level of spend into the marketplace to create awareness and consideration and to move people further down the funnel. In the next couple of years, we will really have to prepare Jaguar for future products.
Does Jaguar still suffer from the perception of poor quality? It ranks very high in the J.D. Power and Associates Sales Satisfaction Index and Customer Service Index studies but lags the competition in sales.
Until now we just haven't had the powertrains and the products. If you look at the two issues beyond that, one is awareness. For the past 10 years, on average, Jaguar has been the top premium brand in SSI, No. 2 on CSI and APEAL [Automotive Performance, Execution and Layout] and fourth on IQS [Initial Quality Study]. You're right, we haven't gotten the message through. We have to live down this reputation because it isn't the case.
There is a misnomer on the quality and reliability. People would give their right arm for the results we have for Jaguar. We have not had a breakthrough on the communications side.
Are you spending as much on marketing as your German competition?
No one is ever going to spend as much as the competition. We are on a mission to make sure that over the next two years we spend sufficiently on Jaguar to make sure we get real serious brand breakthrough.
The target is to be a serious fourth player globally against the three German brands, and in the U.S. the fifth when including Lexus. There will be a gap on volume, but I'm talking about perception and being in the same sentence.
How long will that take?
With Land Rover, we are there now. On Jaguar we have two years to make sure that we have absolutely prepared the market for the next onslaught of products.
Land Rover is at the bottom of the J.D. Power CSI study for the third straight year. Dealers were dinged for providing poor service, and customers complained about repairs.
The irony is those same customers are going into the same building with the same owner but making different comments about Jaguar. The same infotainment system gets marked differently between the two brands. We have to break through this perception of quality and reliability. We have not gotten the message through about British Engineering Inc. like the Germans have with German Engineering Inc.
British engineering hasn't had a stellar reputation.
That is part of the problem. Look at the Jaguar side as an example and look at what we are doing with the products -- this is a perception issue. We lead the world in aluminum technology. We have the biggest aluminum body shop in the world. We have taken 800 pounds off the new Range Rover Sport and 700 pounds off the Range Rover. We are spending 500 million sterling [$776 million] on a new engine plant [in Wolverhampton, England] for smaller displacement engines.
How are you going to meet the upcoming stricter U.S. corporate average fuel economy standards?
Over $700 million will be spent on this engine plant and that will produce a four-cylinder engine that will hit a lot of Jaguar and Land Rover vehicles moving forward.
You have only one four-cylinder engine now.
Yes. That four-cylinder engine is Ford-based. The engine plant is finished in 2015 so from then on we will be able to put them into our own vehicles. That plant will produce mainly four-cylinder [gasoline] and diesel engines. We know that we have to move so we are not just a [gasoline engine] company in the U.S. It is not clear how we will do that yet -- meaning diesel and hybrid.
The big deal is we are best at taking weight out of SUVs by using aluminum. We will do the same thing on the cars as well.
Most of your competitors are working on vehicles for Gen Y buyers. Do you need to move in that direction?
You should not pigeonhole yourself so much. We conquest customers but we are selling cars that are $40,000 to $80,000. They are bought by people in their 30s and early 40s. Even the average Evoque buyer is 43 years old. The average [Evoque] transaction price is nearly $50,000. We are not Scion.
You have said establishing dealerships with both Jaguar and Land Rover franchises is going slowly. Is that still the case?
Yes. We are 60 percent channeled -- we've moved from the 50s. It is a long haul. We are getting there.
So will you give some dealers the brand they don't have?
That will be part of it but we want more buy and sells in Chicago, Denver, Detroit, Florida, the Carolinas and Boston.
What is your biggest achievement since becoming CEO two years ago?
We have a strategy here and everyone knows what it is. Secondly, we have aligned the organization to our goals. We made a lot of tough calls on people. Last summer, we let go 26 managers and brought in new expertise on preowned and training to head up the regions and customer service and brand leaders for both brands.