Despite fielding two crossovers in the past few years, Jaguar still has a sedan problem. Namely, the marque's sedans aren't selling as well as it would like, and the consumer's recent apathy to this body style, one that has even forced Honda to cut back Accord production, has hit the brand especially hard. Specifically, XE and XF sedan sales haven't been making a dent – far off the charts of top-selling models in just about every country – even in markets still predisposed to four-door luxury cars such as China.
For the past few years, industry observers have feared that Jaguar still has too many sedans in the lineup – part of an earlier effort to take on German automakers in just about every segment – while a bet on diesel engines hatched at the same time as the outbreak of Volkswagen's sweeping diesel emissions violations hasn't helped. Jaguar's bet on diesel recently contributed to a particularly stinging financial loss at parent Jaguar Land Rover in the fourth quarter of 2018, one in which Jaguar admitted that it won't see returns on investments that it envisioned. The automaker also plans to cut 10 percent of its work force, feeding speculation of larger-than-reported problems.
A solution isn't as simple as cutting models and doubling down on crossovers and SUVs, even though that's what some automakers have done. The XE and XF are both about 4 years old – merely at the middle of their product cycles; Jaguar is currently making plans for their replacements amid a gloomy outlook for sedans in the near future.
How will Jaguar weather this storm?
Autocar reports that the automaker is considering combining the XE and XF into one model, a sedan that could be offered as an EV or a plug-in hybrid. As innovative as the plan sounds, Autocar notes, it would represent an even bigger bet on a powetrain technology than a stake on diesel engines represented four years ago.
For one thing, EV and PHEV sales still make up a tiny percentage of all luxury sedan sales, and Jaguar is already planning to make the next XJ a battery-electric model. Such a direction, Autocar cautions, could leave Jaguar with no fallback position if the expected rush into EVs suffers setbacks across the industry. The automaker expects big cities to take the lead in EV adoption, but there is still a gap between the early adopters and the market as a whole that may not fade as quickly as some hope. Jaguar is also cognizant of the fact that some regional markets could be far quicker to adopt EVs than others, creating an imbalance that could catch automakers unprepared if they were to stake most of their lineups on EVs. A mix of gasoline and PHEV powerplants for its sedans seems like a safer bet in the near term, one that will allow Jaguar to compete in vastly different markets when it comes to EV adoption.
Will hybrid versions of the XE and XF be able to turn Jaguar sales around in the near term? Even if the two sedans struggle along until the end of their product cycles, the other half of the company may be able to pick up the slack to keep earnings in the black. The biggest news of 2019 for JLR will be the debut of the all-new Defender, news that may well upstage the launch of the second-generation Evoque that will go on sale in the second half of the year.
There is still some time for Jaguar to make up its mind about its two smaller sedans before their time on the shelf is up, but in the meantime both models will see significant midcycle updates in 2019 that will include hybrid powertrains for both sedans; one of the versions of the upcoming hybrids will use a 1.5-liter, three-cylinder engine, Autocar says.