It makes sense for Jaguar Land Rover to concentrate attention on China, the biggest single-country operation for the company and a critical piece of its future plans
Strategic sharpness and excellence in execution, targeted objectives and the ambitions fuelling them have combined to ensure a place at the top table for Jaguar Land Rover (JLR) in China’s automotive industry. From breaking through in a tightly contested market to fortifying its presence with impressive all-round growth, JLR has turned China into the most important single-country operation of its business in a span of seven years.
JLR set down roots in China in mid-2010, when it began functioning with 40 employees spread across the company headquarters in Shanghai and regional offices in Beijing, Guangzhou and Chengdu. It has cashed in on the innovation, design and engineering expertise that has thrived within since the enterprise was acquired by Tata Motors, and its British heritage as well, to make inroads in a market where speed of thought and action is paramount.
The ability to deliver consistently high-quality cars to customers hungry for, and knowledgeable about, the best in the world has marked JLR’s rapid ascent in China. This constantly developing operation now includes import centres in Guangzhou, Shanghai and Tianjin, outlets for the distribution of spares, training academies and apprentice programmes, and JLR’s first overseas manufacturing facility (in Changshu near Shanghai).
With sales of more than 125,000 vehicles in 2016-17 — up 32% from the previous year — a workforce of some 700 people, a 200-strong dealership network that covers about 100 cities in the country, and further investments in the pipeline, the China venture has made vigorous progress to become the biggest chunk in JLR’s global business basket.
Buttressing JLR’s position in China has been the partnership with Chery Automobile Co (see Two together in cruise control). Established in 2012, Chery Jaguar Land Rover (CJLR) has been a shining success, providing JLR with the means to manufacture cars in China and adding to the company’s clout in the country.
The bridge between JLR China and CJLR is an entity known as ‘integrated marketing, sales and service’ (IMSS), a cooperative model operated and managed jointly by the two. IMSS handles the marketing, sales and service of all imported and locally produced Jaguar and Land Rover vehicles in China. Its support has been crucial in enabling JLR to cater better to customers and in beefing up the collaborative approach with Chery.
“With year-on-year growth seen over 20 consecutive months, our China operations have continued to flourish,” says Pan Qing, executive director of JLR China. “Our role as part of the wider JLR family has also grown.” And growth can only increase in the future, given that JLR is pumping in around 15% of its annual global revenues back into creating more automotive products and facilities.
Committing further resources to China is logical from the perspective of JLR’s long-term aims and prospects. “JLR China will become a hub for research and development, innovation, procurement and technology,” says Mr Qing. “JLR is on a journey to transform itself into a technology company that makes world-class cars. China is at the core of the future we have envisioned.”
There is no dearth of challenges confronting JLR as it goes about realising its goals in China. “This country has been a leading player in the automotive industry for the past seven consecutive years and the market here has entered a phase where the ‘new normal’ is stable growth,” adds Mr Qing. “Fierce competition and the entrance of new players means we have to make ourselves stand out with new technology and the innovations that consumers want. And that’s what we have set our minds on.”
Electric and hybrids are the frontier every automotive is driving towards and JLR is no exception. “Chinese customers are demanding electric, hybrid and intelligent vehicles and automakers are vying with one another to take the lead in developing these,” says Mr Qing. “That translates into heightened competition to engineer the most efficient cars, the longest-lasting batteries, and the best intelligence systems. What JLR China has, in the circumstances, is the opportunity to prosper.”
The advantage JLR has over the competition, explains Mr Qing, is that it has been quicker in making the move from internal combustion engines to automation, connectivity and electric mobility. “China is a nation full of innovations and possibilities. It is the ideal market to focus JLR’s efforts and investments on. And that’s what we intend to do.”