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Jaguar's Back in the Hunt

The British luxury carmaker, known for sleek lines and peak performance, releases a powerful new sports car. But will this quick cat capture strong sales?
Paul A. Eisenstein
From the Print Edition:
William Shatner, Sept/Oct 2006

The sun sears down on parched sand. Even the snakes and scorpions have crawled off in search of shade. But a cat is on the prowl, and you can hear its growl blowing in on the wind. You squint and scan the horizon, wondering where it might be hiding, only to stagger back as it crests the barren hill, pawing the blistered tarmac. Almost as quickly as it appears, it is gone, as if carried off by the superheated wind.

A mirage? Not this time. It is the new Jaguar XK, the long-awaited and equally long-overdue new sports car from the British automaker, out for a test drive along the southern coast of Baja California. The 2007 XK is the spiritual heir, in sheet metal, to the legendary E-Type Jaguar, perhaps the most coveted sports car in history.

The automaker's latest ad campaign would sum things up in a word: gorgeous. Only the crabbiest critic might deny that claim. Low, lithe and just a bit menacing, the XK is a visual standout in a world of look-alike sedans and trucks. It is the automotive embodiment of a powerful feline, both in its coupe and convertible body styles. But does this cat have claws?

That's the critical question for Jaguar, a larger-than-life brand struggling with smaller-than-anticipated sales. Not all that long ago, plans called for the marque to nudge its way into the first tier of global luxury nameplates, challenging the likes of Lexus, Mercedes-Benz and BMW. But raw ambition doesn't always deliver grand results, and the British marque has stumbled badly in recent years. The new XK's design declares that Jaguar is back. But will luxury buyers agree?

WILL X MARK THE SPOT?
It's been five years since Jaguar launched another critical "X" model, in that case, the downsized X-Type. Known inside the company as the "Baby Jag," the compact four-door dropped smack into what was then the fastest-growing segment of the luxury market. Offering a vehicle with all-wheel-drive as standard equipment at a modest $29,950 starting price, Jaguar's American parent, the Ford Motor Co., was confident enough to set up an entire assembly plant (Jaguar's third) for the X-Type. With the addition of the new model line, Jac Nasser, then Ford's chief executive officer, boldly predicted the British brand's sales would soon top 200,000 a year. Jaguar, he declared, would serve as the centerpiece of Ford's lineup of overseas luxury brands, the Premier Automotive Group. A plenitude of skeptics notwithstanding, it seemed that Jaguar, a brand that had already looked into the abyss, had no place to go but up. Only after snapping up the ailing marque, in 1989, for a jaw-dropping $2.5 billion, did Ford recognize the chaos surrounding the company. Browns Lane, Jaguar's home assembly plant in Crewe, required over 200 man-hours to build a car—10 times more than a top-line Lexus. Quality was abysmal, with as many as 11 defects a vehicle, compared with fewer than one for its Japanese rival. Product development programs typically ran years late and millions of dollars over budget.

"We had no idea just how bad the situation was," former Ford Chief Financial Officer Allan Gilmour admitted at the time. Even as the U.S. parent pumped in millions to shore up its acquisition, sales plunged and losses mounted. By 1992, Jag's global sales had slumped to just 22,074, leading Ford to give serious thought to writing off its investment. But the British brand had a powerful ally in the form of William Clay Ford Sr. The grandson of founder Henry Ford, the father of the current chairman, Bill Ford Jr., and a powerful voice on the board, he was—and remains—determined to keep Jaguar going, inside sources reveal, whatever the cost.

By the mid-1990s, signs indicated that the senior Ford's optimism was justified. The ancient Browns Lane factory, in the British Midlands, was completely rebuilt and some of Ford's best and brightest, including Nick Scheele (the man who would later become Ford's chief operating officer), were assigned to the troubled subsidiary. Things started to turn around. Productivity jumped sharply, slashing manufacturing costs. Then the unimaginable happened as quality began to rise sharply. For decades, using the words Jaguar and quality in the same sentence seemed a contradiction in terms. Yet suddenly, the automaker was nudging into the top tiers on the Initial Quality and Customer Satisfaction charts compiled by the widely quoted California market research guru, J.D. Power and Associates.

By 1997, worldwide sales had doubled, the United States alone accounting for 25,000 sales. That year, Jaguar began the most aggressive launch in its long and checkered history. First came an all-new XK8, the next generation of Jaguar's flagship coupe/convertible twins. It would have been hard to miss what automotive stylists call the "design DNA" in the model sculpted by the late Geoff Lawson. Though clearly a car for modern times, the '97 XK was unmistakably derived from the E-Type, and the crowds loved it.

Then, in 1998, came the S-Type, the automaker's first midsized saloon car in decades. The launch was accompanied by the opening of Jaguar's second assembly line. The big XJ sedan was updated the same year, and work began on the little X-Type. All told, Jaguar would soon have its broadest lineup ever, and an opportunity to reinvent itself, something that the automaker had done many times in its history.

THE SWALLOW EVOLVES
While Jaguar may evermore be linked to the luxury market, things certainly didn't start out that way. Even today, the man most often associated with Jaguar is Sir William Lyons. Born in 1901, this son of a music shopkeeper developed an interest in motorcycles. Lyons was infatuated with an octagonal sidecar developed by a neighbor, William Walmsley, and with help from their parents, the two men set up a small shop that became, in 1922, the Swallow Sidecar Co.


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