Introducing New Models During A Downturn

Does it really make sense for Jaguar Land Rover to introduce new models in the face of the worst market since WWII? It just may be the savviest move they can make…

While the majority of automakers are unveiling new vehicles at the North American International Auto Show (Porsche and Nissan two notable exceptions), Land Rover chose a different venue to make a splash: the London International Boat Show. It seemed like the perfect place to unveil the new Range Rover Sport Stormer Edition. (After all, the Stormer won’t be available in the States anyway.)

The package includes some minor cosmetic upgrades to the exterior, most noticeably in the form of 20 inch 10-spoke alloy wheels, a rear spoiler, revised front and rear bumpers (the latter with integrated rectangular exhaust tips), and monochromatic lower body side and lower tailgate moldings. Inside, leather seats are standard as well as front and rear parking sensors and telephone integration. And it’s powered by a 2.7 liter twin-turbo V-6 diesel, which is not currently available in the U.S.

Jaguar – the other half of Jaguar Land Rover – did choose the big show in Detroit to introduce two new high-performance models; the XFR and XKR.

So what gives? We thought we were in a global downturn and here comes Jaguar Land Rover introducing new models. This, while the company recently announced that it will be cutting 450 jobs in the wake of collapsing sales; eliminating about 15 percent of its managers – representing 300 positions – and cutting another 150 salaried employees from its global workforce. (JLR employs about 15,000 workers globally, according to Reuters.)

It should be noted, however, that Jaguar actually posted an 8 percent sales increase for 2008, selling 65,000 vehicles worldwide, so they must be doing something right.

“Overall, the global auto market is considerably down, particularly in markets like the United States and the UK, and it’s basically because customers cannot raise credit to buy new cars,” a Jaguar Land Rover spokesman told Reuters.

Further cuts are likely as JLR Chief Executive David Smith doesn’t “expect sales conditions to return to normal levels for some time.

So why the new models now? Because the company is still in business, that’s why. You cut where you can. You scrimp and save. And you muddle through. The one thing you don’t do, however, is stop innovating. Because when the economy turns, it’ll be the models that turn the most heads that will ultimately win out. This is no time to give up.