Land Rover goes green as rising petrol prices hit sales

Jul 16 2008 by Alistair Houghton, Liverpool Daily Post

Alistair Houghton meets PHIL POPHAM, Land Rover’s global managing director

AS HIS latest model gleamed under the spotlights and the admiring eyes of passers-by at St George’s Hall, it was easy to understand why Phil Popham thinks he has the best job in the motor industry.

Land Rover’s new small and environmentally-friendly LRX concept car made its Liverpool debut at last week’s CBI Merseyside dinner where Popham, the car firm’s global managing director, was keynote speaker.

Times are hard for car manufacturers. The credit crunch means many consumers in UK, North America and Europe have less money to spend on cars, while rising oil prices mean those buyers are demanding ever more fuel- efficient models.

Meanwhile, 4x4s have slumped in popularity as they are increasingly – and, according to Land Rover, unfairly – viewed as environmentally-unfriendly "gas guzzlers".

Land Rover sales have suffered as a result. In May, according to the Society of Motor Manufacturers & Traders, the number of new Land Rovers registered fell 32.55%, compared to May last year.

But Land Rover, which saw a third consecutive record sales year in 2007 with worldwide sales beating 200,000 for the first time, is fighting back.

The company, bought by Indian group Tata in March, along with sister brand Jaguar, is pushing its vehicles in emerging overseas markets such as China and Russia where sales have soared.

The LRX – labelled the world’s greenest 4x4 – is the latest example of Land Rover’s increasing focus on fuel efficiency and environmentally- friendly technology.

The car has been warmly welcomed around the world – and that could be good news for Jaguar Land Rover’s Halewood plant, which already employs more than 2,000 people building Land Rover Freelander 2s and Jaguar X-Types. It is seen as the most likely plant to build the LRX.

Land Rover was founded 60 years ago by Rover and has grown into a British automotive icon. West Midlander and West Bromwich Albion season ticket holder Popham, 42, has spent all bar two years of his career at Land Rover, and took the helm in 2006.

His loyalty to the brand means he wants to avoid simple price cuts that may increase sales but could dilute the brand’s value as a premium product.

Instead, the company is focusing on increasing overseas sales to counter falling volumes in the US and UK.

"One of the benefits of being a global brand is that you’ve got natural hedging against risk," said Popham. "We sell in 169 countries around the world, and I’m glad to say that we’re not overly reliant on any particular region from a volume, sales or profit point of view."

"We’ve been able to benefit because of the growth in some of the emerging markets. China has grown by over 150% for us this year, growth is at about 120% in Russia and it’s also booming in Australia where the market is strong because of their mineral exports. There’s some natural offsets to our position in economies that are struggling at the moment."

Land Rover is also investing in environmentally-friendly technology to help it cope in a market where consumers are demanding greener and more fuel-efficient vehicles. Last month, it announced a £700m investment in green research and development that could create hundreds of engineering jobs in the West Midlands.

Popham said: "We don’t believe there’s a silver bullet, a single solution to environmental performance or reduced emissions. We’re investing £700m in a whole host of technologies from taking weight out of vehicles through to diesel power, hybrid power and alternative fuels.

4x4s, including Land Rovers, are regularly tarred as gas guzzlers and are a favourite target of the environmental lobby. It’s a charge that clearly annoys Popham.