Volvo, Lexus, BMW, Audi, Mercedes Benz and Cadillac experienced striking sales growth in China during the course of 2018. Jaguar Land Rover posted less than impressive sales results. The company cited challenging market conditions and the trade dispute between China and the USA. The trade dispute didn’t affect the other manufacturers so what is the real reason behind JLR’s 22 percent sales slump in China?
Last year Jaguar and Land Rover owners protested in front of JLR’s Shanghai headquarters. So what was the many protests about?
Poor quality and reliability.
JLR started manufacturing China made cars back in 2014. The locally-made vehicles range from the Evoque, Discovery, E-Pace, Jaguar XFL and EXL.
Making cars in China allowed Jaguar to avoid a 25 percent customs charge. And it also allowed JLR to make cars to suit regional preferences. So a longer wheel-base for more rear interior space is one such example.
From selling 92,000 vehicles in 2015 JLR sales rose to 146,000 units in 2017. However, a familiar trait and habit had been established. Poor product quality and reliability issues.
During 2017 JLR issued 13 recalls in China. More than 106,000 vehicles were recalled and issues ranged from engine reliability, batteries, instrument panels and airbags.
To put it into context the 2017 recall amounted to 70 percent of total China sales for that year. By any standard that is unacceptable.
After all Jaguar Lland Rover has been manufacturing vehicles for over 70 years. They should know what they are doing by now.
More than likely the issue isn’t to do with a lack of production knowledge nor basic incompetence. More so it is to do with a lack of investment and or cost-cutting measures.
The knock-on effect has been evident in JLR’s China sales decline. And now production slow down because the brand’s image is severely dented.
JLR’s other problems stem from a poor dealer network setup and being slow to react to regulatory vehicle emissions laws.
As Audi, Mercedes and BMW are electrifying their vehicles, JLR seems to be on the continual back foot.
Nevertheless, the production quality isn’t just a China specific problem it’s a residual problem for JLR.
