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Hyundai wants Jaguar. Good idea?
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Comments
The Hyundai representative said that the company had studied a purchase of Jaguar, but it is no longer interested.
The problem with Jaguar is that it is so tightly wound to a certain niche market it cannot be unwoven without becoming something else.
Unfortunately, that niche market - a country club on wheels - no longer exists.
Ford best hope Renault Nissan is interested.
Ford bought Jaguar and seems to have handled it very poorly.
AP has the story up now - see link. Either Hyundai is out of the running for Jaguar or is trying to drive down the price.
http://biz.yahoo.com/ap/060818/skorea_hyundai_jaguar.html?.v=2
The XK and XJ are as good as they have ever been. The problem is there is no real market for that type of coddling yet classy luxury car.
People with big bucks either want sport performance, a la Benz and BMW, or Bling, a la the Escalades, and the like.
Jaguar was a car for a time that has past, just like many other great names, line Deusenberg.
Ford made the big cats reliable and brought the technology up to date. Unfortunately for Ford, the market is all dog now.
However I never could understand why Ford wanted Jaguar--no disrespect to Jag, but it didn't seem like a good match to me.
Every Jag has a BMW that it pretty directly competes with:
x-type -> 3-series
s-type -> 5-series
xj -> 7-series
xk -> 6-series
The most obvious difference between jaguar and BMW is in driving dynamics. I drove an '04 XJ recently, and although it was very capable, it was hard to push, because it gave no feedback. BUT many people DON'T like feedback. Many people slam BMW's for giving feedback, the poor sods.
BMW wants to please those people, but can't risk losing its fanbase that it's already alienating by making cars in which you won't notice cracks in the road. So, if bmw buys jaguar, they can say, ok, here's a 3-series. Put one of your pretty bodies on it and make it smother and dial out most of the feedback.
Development costs have to be what's killing jag. Ford just doesn't have the parts bin to raid. Although the XJ i drove was beautiful, there were obvious cost-cutting elements in it. Same with the x-type.
Jag has to make their own v8's, and doesn't make that many of them. The v6 is duratec derived, but Jag had to do a lot to it, and it's still not that impressive of a mill. In both cases, i am sure the economies of scale are not there. I'm sure it would save jaguar a lot of development costs, as well as manufacturing expense, if they could have a boat of crated v8's drivetrains dropped off from munich.
Of course, the experience with rover may have soured BMW to this whole concept.
dave
I just don't know why Jaguar elicits so little interest anymore---they just aren't exciting enough to be a BMW and not good enough to be a Lexus or big enough to fight Mercedes model for model. Jaguar is like an British Volvo.
From 1940 onward Lincoln was in the mold of a 'fancy Ford' while Cadillac had an image that was clearly its own.
I mean, what IS a Jaguar anymore? Does one instantly say "sports car!" ....I don't think so...."world class" (dominant, without peer, etc.) luxury car? Well, .....not really....."enthustiasts sport sedan"....nooooo.....
So where it is in people's minds? It's kind of mushy, don't you think?
If Hyundai decided this is not the way to go (and as we speak, they have done exactly that), then all power to Hyundai. The company has so much going for them right now, and the future is looking ever so bright...my take is that acquiring Jag, for example, won't help the company to improve any faster/better than on its own. Hyundai has come a long way, and is in hot pursuit to become as one of the top five automakers in the world (now sixth behind GM, Toyota, Ford, VW, and DCX).
Good luck Jag/Ford!!
PS: Does anyone think Ford should consolidate Lincoln and Mercury? It makes no sense to me having two brands with almost identical lineup.
Do the Koreans have the vision (we know they have the money) to pull this off? I doubt it.
M
Had the deal gone through, I actually wouldn't mind getting a Jag for thousands less than competitors, and with a great warranty to go along...oh well!!
Hyundai's utilitarian philosopy ('a car = a pencil = a fridge = a car = a fence post') create an instant conflict what Jaguar needs to be successful.
Yes, Jag doesn't need to match MB/BMW/Audi in volume. To keep going they need to double sales from the current low.
http://www.ft.com/cms/s/3126ac52-330d-11db-87ac-0000779e2340.html
I reckon a private equity would drop the X and S and concentrate on the higher end. They would need to get a real good price in order to make the investment work.
Ford has hope though. One of the teams is lead by Nasser. Nasser never saw an investment he was not willing to overpay for
http://www.avantimotors.com/studespecific.htm
Jaguar is not quite Avanti yet. But if Nasser is talking decent money for the brand, I see only upside for Ford and losses for the investors.
Maybe Land Rover will be able to make some money for them. But isn't Land Rover starting to adapt its platforms from Volvo bases? Ford is not going to sell Volvo as best I can tell. Somehow I doubt Ford will continue supplying technology to what would then be a Land Rover competitor.
I may only be 23 but I remember when Jaguar was considered the little cousin of Rolls-Royce- that is the benchmark to which the brand was compared. It is now compared to those German brands- a massive step down in its prestige. I remember when the car I drive, the XJ, was the least expensive vehicle manufactured by Jag. The S-type was considered the “baby Jag”. So what’s the primary mistake? If the S-type is the “baby-Jag” what’s the X-Type- the “fetal Jag”?
I am going to try to temper the snobbish arrogance that goes along with being an aesthete (and having an M.E. in Engineering). I now have the disgrace of being associated with these 25 year-old cubical working owners of cheap X-type Jags, who drive too fast and do not recognize the bastardization of the brand that they are doing disgrace to. I know that the X-type was created in order to create customer loyalty. I don’t believe for a single second that is what is happening: these people are not likely to buy another more expensive Jag even in the future- they probably cannot afford to maintain it. As a note on brand loyalty, I believe that in particular to jaguar it runs in families. My parents have one as well as my grandparents.
Ford and the management at Jaguar, incidentally know that the X-type was a mistake and that it has cheapened the marque- you will probably never see an advertisement for an X-type Jaguar. They should have moved the other direction: there is a niche at about $140,000 to $160,000. The fact that they are English helps immensely in this area there is an luxury aesthetic that is wholly English and which the Germans really don’t understand well- the German culture is very austere in its aesthetic.
As for Hyundai- if they do indeed purchase Jag, I can say that it will be the end of my family's involvement with the brand. This I can guarantee.
jag had a very unrealiable rep. at least ford fixed that.
I do agree that the X-type was a huge mistake. It is, however, the nicest Contour I've ever seen!
What made Jaguars unreliable "back then" was a company that was undercapitalized. They were always cash-short and cutting corners, and foreced to reproduce the same mistake over and over. I think Ford allowed them to shed that liability by developing new or "bent to fit" engines and drivelines (it costs many millions to develop a single new engine).
But of course this baked all the character out of the car...and really, the only thing Jaguar HAD was character and good looks.
I mean really...put a Dodge drivetrain in a Mercedes and what have you got? yeah, your local mechanic can fix it (maybe) but the character and "feel" of the car is gone, gone, gone.
But don't Jaguar fans have at least some gratitude for the aluminum frames and the better engines Ford ownership is largely responsible for?
Further, as a multi-generational fan, what is your opinion of the styling of the new XJ? Many have criticized Ford for building great improvements into the platform and engine, but then lamented how close the current XJ resembles the previous model.
In my mind, however, I did not see where Jaguar had too much wriggle room. Would you as a third generation Jag afficianado accepted a strong deviation from the traditional Jag sedan look?
You know, as far as the current XJ styling, I don't like it quite as much as the previous model XJ. I really like the size, but the exterior in particular seems to have... less attention to detail. It isn't; quite as pretty of a car.
As far as radical styling changes. Automobile magazine had this picture (I am pretty sure it is a Photoshopped thing) of some green device, that they are saying is similar to the new XJ styling which is supposed to appear in 2009, that my friend made a point to show me. When I first saw it I had a sinking feeling of disappointment in my stomach- it is so radically different. I have warmed to the idea a little more, and can understand that time may necessitate a new design regime for the vehicle. My only problem is that I don't want Jaguar to loose what I feel to be a form of classicism that does not go out of style.
If Hyundai took over Jaguar.....think of it this way. Ford-controlled Jaguar is to Hyundai-controlled Jaguar as biting a piece of aluminum is to biting into a piece of your own feces. What do they have in common? One's bitterly impractical and terribly mismanaged, and the other's more impractical than having a rock take the SAT's.
Hyundai builds their cars terribly, and with Jaguar they'd be no different. Ford, of course, builds their cars terribly as well, but not near as terribly. And of course, with Ford you get the satisfaction that the money you make in America stays in America.
I understand about Ford's condition, and have also filtered that into my thinking, but the odds are and are most certain to be that Hyundai is not a solution, but a sort of a feeder to dying marque. Ford selling Jag to Hyundai is only something to keep Jag going while it perishes anyway. In a sense, that could apply to Ford as well, but there is, however, another solution.
A chairman for JCB, a company with nothing to do with automobiles, has expressed interest in Jaguar as well. Here's the catch: they have a secret weapon. Matthew Taylor, who left Land Rover to join JCB, knows the business inside and out, and managed by him, Jag could make a comeback. Who knows? I'm not saying selling an auto company to a not-auto company is the best idea, but it's a start.
And it ain't Hyundai, thank goodness.
JCB is a world leader in the construction equipment business. The company is very innovative and sound financially. JCB just built a new manufacturing plant in Georgia.
The Bamford family still owns JCB and it is a private company. Here is a link to their company history.
http://www.jcb.com/(jqcrpcrsjfx44kzaql3u1j55)/aboutjcb/getting_job_done.aspx
Ford had a real challenge when it came to the XJ redesign. They took a pretty conservative route this time. I personally am not sure it was the right thing to do. But with such an iconic design, I am not certain what Ford could have done otherwise.
Very difficult choices.
1) JCB
2) Hyundai
3) Ford
I put JCB first because of their British heritage, excellent reputation for service and financial strength. I put Ford last because it will take lots of money to get Jaguar back on track.
You know, you go to car dealerships and look around and any Hyundai you see looks cheap. You look at the price tag and some of them go up to almost 30 grand. It's a Hyundai. I wouldn't pay half that for it. That is saying something given that I have spent more than 15 grand in tbe past year and a half just maintaining my Jag. You know Hyundai's image is horrible in my eyes- and is so beneath Jag it simply isn't funny to me.
You know you have to understand the motivation of Hyundai. So, you think back to my International Political Economy Days in college. Incidentally, just to add some sort of levity to this, My moderators for IPE were not lightweights in this field. Eul is considered an expert ( and he is Korean) and Phillipe is the former CEO of TOTAL (that being the oil corporation).
The South Koreans in a general sense want to outdo Japan. If you ask the executives at Hyundai what their motive is, and they will tell you that they want to outdo Toyota, and so it would make sense for them to attempt to acquire a brand to compete with Lexus. Lexus really is the least expensive, least exciting (IMO) luxury brand. Of course, there is a practical reason Lexus is cheaper on the whole. The brand needed to be significantly separated from Toyota, so there are very few options on a Lexus- everything is already on it. Unlike German brands, where everything is an option- its a German thing- they don't even like sunroofs. So Lexus can be manufactured at far less of a cost, because it is repetitive. The German brands are rather inefficient in their manufacture- something that German sensibilities won't like but it is true. When you purchase a car, you purchase the culture that manufactured it. In addition to this, in order for Lexus to compete, it really needed to infiltrate the European Market: in particular the German brands. In fact, if you look at the brochures of the Lexus IS, Every picture is taken in Germany. ...That was a bit off subject...
Anyway, Lexus to me, is an engrandized Toyota, and so I wouldn't believe it to be the natural competitor of Jag, which is what Hyundai would attempt to do make Jag. Hyundai needs to compete with Lexus, Lexus is designed to compete with German Brands. In fact, Lexus steals design cues from German cars. The New LS viewed from the side looks like a 7 series BMW with the rear lights of the 5 series. But German and English Cars are nothing alike really. You can sit in any English Car A Jaguar XJ, Bentley Arnage, Rolls-Royce Silver Seraph, and then sit in any German car and you can really see a massive difference. English cars are very sui generis- you can ususally tell that a car is English by its syling, and implicitly Jag is not the natural competitor of Lexus either.
Like I said...it would end my involvement with Jag, were Hyundai to purchase it.
I would be sorry to see Jaguar turned into a badge engineered Hyundai. For some reason Lexus buyers do not mind their cars sharing platforms and a large percentage of components with Toyota models. This wouldn't work for Jaguar or other Euro brands.
I wonder if JCB will make Ford a firm offer. At what price would Ford sell Jaguar?
I must say though that I think you left out one component of possible Korean ownership of Jaguar. The Korean companies just like the Japanese are social climbers, they want status and they want it badly. Funny that you mentioned Lexus and their practices, a lot of it geared towards gaining equal ground on prestige/status front with the Germans. The Koreans are even worse than the Japanese on the issues of copying and what not right now.
I think Hyundai would love to have a brand of theirs mentioned in the same breath with the German brands and therefore they wouldn't dramatically cheapen Jaguar, IMO of course. I think they'd try their best to keep Jaguar as is and give them a proper development budget.........here it comes.......at first. Now if Jaguar couldn't turn themselves around on their own in say like 5 years then what you speak of would likely happen because I too think (well I know) Hyundai would be clueless on how to build a Jaguar on their own. The only way for Korean ownership of Jaguar to work is hands-off ownership, which I think Hyundai would give, again......at first. If it didn't work, I think we'd be looking at another GM-Saab like episode. I'd rather see Jaguar become a glorious luxury car maker under some private owner who can barely balance the books, but remain open while providing some truly stunning cars than to become a "poodle in a Hyundai/Kia circus" (a paraphrase of Shiftright's take on Saab under GM) by rebadging or sharing platforms with anything Korean. Either that or just let the brand die. I've had to sit and watch Saab become GM Europe and it is disgusting for the most part. I don't think I could stand to see that happen to Jaguar.
M
How do you think the JCB purchase of Jaguar would work out if indeed it happens?
A group of bigwigs in Detroit were invited to Henry Kaiser's announcement that he was going to build a car for postwar (WWII) America. He invited other car company execs and also the press. He announced that the new Kaiser Frazier factory was being capitalized at $40 million dollars to start with (in 1940s money).
A voice rang out from the back of the room: "Give that man ONE CHIP!"
It takes a LOT of money to play in the auto biz successfully; otherwise, you are like the stock trader with a capitalization of $100. Even if you score big you can't score big.
M
I think I got that from your last post, I don't think they would though. They would have to see that competing with the Germans and Lexus didn't work under Ford either. They'd be throwing good money after bad on that one. Jaguar has to move upmarket and go exclusive and that means no X-Type and possibly no S-Type either. Both of those classes move very fast and Japan and Germany both of them firmly.
M
The other thing I didn't mention, as I actually forgot as I went through my post, is that some of the decisions may not be in the hands of the company. Asian coutries tend to have a fairly large involvment with "Pride Industries" if you will. The Japanese and South Korean governments are heavily involved with Toyota and Hyundai respectively. These companies basically receive their marching orders from the government. On a political level the environment snaps back to that Japan / Korea rivalry thing.
All of this is a sort of cursory speculative analysis on my part, but it really does represent something I don't desire to happen.
Ford has failed to realize that the demographic of people who drive them is not like German cars either. My experience with Jag drivers is that A) they have dynastic wealth b) they are rather sophisticated, not just educated, but the type of people who can tell you that the highest note in "Der Hölle Rache kocht in meinem Herzen" otherwise known as the Aria of the Queen of the Night from the Magic Flute is an F6 (that being the F in the sixth octave)
domestics. After all Ted Kennedy drove an Olds off that bridge.
2001 BMW 330ci/E46, 2008 BMW 335i conv/E93
2001 BMW 330ci/E46, 2008 BMW 335i conv/E93
It's all very ironic for Jaguar because originally the car was conceived as a value automobile for the middle class in England. It was, if anything, a protest against ostentation and the absurd MSRP of cars like Rolls and Bentley.
I'm sorry the company lost its way. Former Lemans winners and makers of REAL sports cars, now the company flounders about not knowing what it is and what it is supposed to be doing. I owned many Jaguars when I was younger and I can still remember my disgust when the XJ6 came out and the E-Type went away. I realize the XJ6 did save the company but as far as I'm concerned it turned out to be a bargain with the devil for the company.
But yeah, Jag is bourgeois even at its highest levels, not a car for the uber-rich.
As far as the Kennedy's, we must have very different standards of "dynastic wealth"- people whom keep their names out fo the papers (the ultimate understatement) and have had money for a lot longer- and didn't aquire it illegally either. I have many friends (older than myself) who fit nicely into that category, are rather unassuming, and still make the Hilton's look like paupers. The other thing I notice, is that a large number of them drive SUVs on a regular basis, Yukons and the like.
As far as Jag being started as a "middle class" car company that comment has no merrit. Why not go back to the beginning? Jaguar should not exist, as it was originally a side-car company before its name was changed. It is illogical, saying that things began one way is no guarantee of a similar end. Time is the guarantor of change- and their is no logical method to differentiate time- by virtue of the fact that time is on a continuum.
Middle class...you know the Queen of England is driven around in, depending, either a Daimler (manufactured by Jag- same thing as the Super V8) or the production armoured Jag (a $400,000 car)- that is actually the most expensive Jag, BTW- it is the world's only production armored vehicle. Of course, there are national interests involved with that. Be that as it may, I really don't see how a car company that manufactured $625,000 supercars (XJ 220) can be middle class- this was even under Ford. Lately though, Jag has been cheaper which I don't like.
I never thought of the Jaguar as unassuming, but rather too-assuming. The car tries too hard to be upper class when everyone knows that its just nouveau riche....not the same thing IMO....you can buy the BMW 325i for the same effect seems to me, and you get a lot better car for your $$$. Old money doesn't buy things that depreciate like rocks off a bridge in other words.