JLR targets 'sustainable' business
12 December 2014
Jaguar Land Rover has pledged to carefully control its volumes in the fleet market and won't chase a leadership position against premium German rivals.
While Chris Newitt, JLR UK sales director, would not quote figures, he is expecting 20% of corporate volume to come from blue-chip companies with fleets of more than 200 cars.
Newitt said: "This isn't a race and we're not saying we want to be the number one premium brand in the UK. The business we do will be sustainable."
Short-cycle business will be limited to 20% of annual volumes to protect the brand image and residuals.
Ken Forbes, JLR global fleet and business director, said: "Daily rental doesn't have to be a dirty word or send residual value setters into fits. If it's done right it is manageable and will expose us to a wider audience of customers."
Fleet sales will be led by the new 99g/km XE, a BMW 3-series rival, and more volume will be added when the 119g/km front-wheel drive Discovery Sport comes on-stream later next year.
Newitt said: "When I joined four years ago we had just one person in the contract hire department and it had to change if we were to take fleet seriously. We've got to match our proposals with a fleet strategy and it's got to stand up to BMW, Audi and Mercedes."
JLR now has a core team of 22 people focused on the fleet business and they will be going to market with a portfolio approach to push the XE and the Discovery Sport. JLR will offer two all-inclusive service plan packages for customers with a 10,000-mile/five-year deal for £475 and a higher-mileage fleet plan at 25,000 miles/five years for £675.
JLR has also appointed 25 fleet specialists dealers to head up SME sales who are tasked with notching up 100 incremental sales each a year. JLR is controlling direct supply to maintain stable delivery times across its UK network. Newitt said delivery times on the XE and Discovery Sport will be kept between a three- to six-month window.
Forbes said RVs were fundamental to its fleet proposition. JLR engaged RV setters early and created a corporate advisory group to help steer the business on the correct way to court fleets. As a result, all future models will be developed with total cost of ownership in mind, using what its calls 'Attribute 17' - a list of the key areas its cars must take into account before going into production.
RV firms Cap, Kee Resources and CDL are all quoting early indications that the XE will offer stronger RVs than equivalent 3-series models. Over three years or 30,000 miles, Cap predicts that the XE will retain 45% of its value.