The reality is the X-Type has done a terrific job

Oct 31 2007 by Alistair Houghton, Liverpool Daily Post

FORD executives must have winced last month when they picked up Time Magazine’s list of the “50 Worst Cars Of All Time”.

For there amongst the “greatest lemons of the automotive industry” was the Jaguar X-Type, launched in 2001 with so much fanfare but which has by all accounts proved a sales disappointment.

The car is built at Merseyside’s Halewood factory, the most efficient Ford plant in the world.

The plant’s fortunes have transformed and it is now seen as the very model of a modern and efficient British car factory.

Halewood, which employs some 2,400 staff, also produces the highly-successful Land Rover Freelander 2.

But while the quality of its work is not in doubt, the products it makes have to sell if it is to have a future.

Jaguar says it believes the X-Type was a success and achieved its objective of growing worldwide sales of the marque.

But analysts say the car has underperformed.

Ford has put Jaguar and Land Rover up for sale and bidders, reportedly including several private equity firms, are circling. Halewood is world-renowned as a top-class vehicle production plant, but the underperformance of Jaguar must be unnerving for its workforce.

The X-Type was designed as what Time called an “entry-luxury model” to compete with the likes of the BMW 3-Series and Mercedes-Benz C-class and attract new buyers to the brand.

Ford was able to use Mondeo technology as the base for its new car and expected its sales to soar.

In April 2001, Jaguar managing director Jonathan Browning told the Daily Post he hoped sales of the new four-wheel drive X-Type would reach 100,000 in 2005-06.

The company wanted it to help Jaguar reach a whole new gene--ration and help boost overall worldwide annual Jaguar sales to 200,000.

In 2002 Jaguar sold 130,330 cars worldwide – of which 73,656 were X-Types.

But in 2006 Jaguar sold just 75,013 cars world-wide, of which 32,519 were X-Types.

The US had been seen as a key market for the X-Type, but sales there have slumped from a high of 30,000 a year after launch to less than 4,000 this year.

Last week Jaguar announced it was to stop exporting X-Types to the US from next Spring. The company blamed the soaring exchange rate, which it said made it hard for the X-types to compete with domestic models.

The company now plans to focus on increasing X-Type sales in some emerging markets, including Eastern Europe and Turkey, and says jobs at Halewood should not be affected by the move.

For Pulitzer Prize-winning automotive critic Dan Neil, who wrote Time’s feature, the idea behind the X-Type was sound but the execution was not.

In a harshly-worded opinion piece, he said: “The result was the English version of the Cadillac Cimarron, a tarted-up insult to a once-proud marque and a financial disaster for the company. It hardly matters that the X-Type was not that bad a car. Young affluent buyers had the feeling they were somehow being grifted (sold a pup). They were.”

The car industry press seems to agree the X-Type is a good product, but entered a crowded market and got its image wrong.

Professor Karel Williams, a motor industry specialist at Manchester Business School, agreed the idea behind the X-Type was a great one.

“With cars, every new model is a roll of the dice,” he said.

“If you roll the dice and get fours and fives, you can keep going for a while. The X-Type was a one.

“It shows how difficult it is to predict these things.

“With the X-Type, before they’d seen it or driven it, people thought it was an absolutely brilliant idea. Look at the BMW 3-series, the Audi A4 and the Mercedes C-Class – that’s where the market is. But the product couldn’t do the business.”

Prof Williams said the perform-ance of the X-Type was no reflection on staff at Halewood.

But he said that if Jaguar and Land Rover were to be sold, the future of all their plants would be put under the microscope.

He said: “It’s an interesting question – what is the long-term future of Jaguar manufacturing if it goes to private equity?

“I would imagine that private equity would be interested in both relocating a significant chunk of component and high-value production to areas like Asia or Eastern Europe and also relocating some final assembly to the US, if it seems that in the long run the market is significant in the US.

“It’s a very unfortunate position. The Liverpool plant is exemplary but the product it was designed for didn’t sell in Europe or the UK or the US. It’s been a failure in all three markets.

“It’s the one that should have done the volumes of the BMW 3-series. It’s the biggest flop in the range.”

But Don Hume, director of corporate and government affairs for Jaguar Land Rover, said the X-Type had achieved its goal.

“The reality is that the X-Type has already done and is doing a terrific job for Jaguar,” he said.

“From the outset it has obviously contributed to a large growth in Jaguar sales volume on a global basis, which at the time was the objective.

“It has introduced a whole new generation to the Jaguar marque, and it continues to lead our development in emerging mark-ets such as Russia and China.

“We’ve just introduced a face-lifted version including an automatic diesel in response largely to customer demand.”

Mr Hume said that in 2006 X-Types still made up 43.4% of all Jaguar cars worldwide, showing they were still key to the company’s plans.

He said: “It’s still the volume player in the field and we expect it to be for very much longer.”

alistairhoughton