Wheels of fortune: Land Rover's Evoque has helped to boost a once-ailing brand
The Evoque divided opinion when it was released last year.
Thursday 02 August 2012
Four years ago it would have been hard to imagine that a money-losing Birmingham manufacturer that had endured five owners in 40 years (and was about to have its sixth) could become in a short period of time a great success story – turning a £1.5bn profit for its group, mentioned in the same breath as Apple for its design, and its Coventry-born designer turned into a "How To Spend It" centrefold.
Yet that is precisely what has happened to Land Rover after Indian giant Tata bought it (and Jaguar) from a cash-strapped Ford in 2008, and to its design director, Gerry McGovern, who now sits on the Jaguar Land Rover board.
So successful has it been that "every- one in the company wants to be a designer now," laughs McGovern, who "by placing design at the heart of everything we do" seems to have with just one model transformed Land Rover.
While the "small, light, feminine and urban looks" of the Range Rover Evoque, launched in June 2011, may not be to everyone's taste, they are certainly appreciated by the 80,000 people who have bought it (75 per cent of whom are outside the UK) as well as the judges who have garlanded it with more than eight major awards. Its success also no doubt contributed to last week's announcement that JRL is creating over 1,000 new jobs at its West Midlands plant.
More importantly for the future of the company, says McGovern, with "80 per cent of people who bought an Evoque never having bought a Land Rover before, it shows that we can produce new designs that can mean new things to new people" – whether in London, Beijing or Delhi. He admits, though, that "a few of our more traditional customers want to gun me down" – a sentiment doubtless encouraged by the Posh Spice Evoque Special Edition launched at Beijing's Auto China motor show in April this year.
Now his new cultural revolution is about to face its toughest test: the launch of the rest of the next generation of Land Rovers, from the flagship next-generation Range Rover in the autumn to his take on the 4x4 that started it all in 1948, the Defender, in 2014–15. "It is massive challenge but no one else is quite like Land Rover, so we will have a killer combination if we can continue to reconcile the production of the best off-roaders in the world with designs that are desirable and resonant with people today."
This isn't the first challenge that he has had to confront in his fight to transform a company world famous for "engineering-led design to one where design leads the engineering". For McGovern nothing illustrates this better than his battle to turn the Evoque LRX prototype into the vehicle that made it into the showrooms.
"We showed the LRX concept for the first time at Detroit and it really hit the spot, and then when we brought it back to the development centre our engineers instantly started talking about the changes that they would have to make it to maintain its 4x4 capability."
And in June, Land Rover engineers won the Royal Academy of Engineering's McRobert Award (the top UK engineering award) for the innovative engineering of the Evoque. For McGovern, these were the fights that he had to win. "Land Rover had become a byword for functionality, where all that mattered was capability. So that our design bible was full of things that came to make a Land Rover a Land Rover, such as a short overhang or high sill" – elements that were originally important for its 4x4 off-road capability. "And while I respect all that heritage, and understand the need to maintain the integrity of the brand in the modern world, we can't be trapped by it, as we need to create relevant, resonant products."
Key to this culture shift was getting "more joined-up thinking" by engineering, manufacturing and design based on "mutual respect for each other's part of the business" as well as "a common desire among them all to create desirable products that sell".
McGovern does admit that he has been helped by the market for SUVs fragmenting, a wider culture shift that has seen "design come of age", and an owner – Mr Tata – "who is keen to be involved in a supportive way".
David Leggett, director of automotive services at Aroq (publisher of motor industry bible just-auto.com), is sceptical of corporate-speak such as "culture of innovation", but he accepts that the Evoque has given the company a major boost. "They have managed to create the perception that Land Rover is a fashionable and up-market brand and have hit a demographic that has a lot of money and is attracted by this," says Leggett – even if they have been helped by market geography that has left them with few direct competitors.
"Ultimately, it was a canny buy for Tata as Ford had already done much of the hard work when they where in charge and so they have been able to turn what was a loss-making company into the main driver for growth in Jaguar Land Rover." And where Ford had run out of money, "Tata have funded a whole new product programme and become a very effective steward of the company, leaving the management to manage".
David Bailey, a professor and motor industry specialist at Coventry University Business School, puts their success down more to "R&D [research and development] innovation" than to marketing, as they have started to reach out to such companies as Williams for access to Formula One technology.
Like Leggett, Professor Bailey feels that this transformation can be overstated as under Ford "Land Rover had already started to make an operating profit". Unlike Leggett, however, who feels that Tata-owned Land Rover could be seen as a "car manufacturer in Britain," he argues that as Land Rover (and Jaguar) are responsible for 80 per cent of the UK's motor industry R&D expenditure, "it is the closest thing that we have to a Great British car company".
For Professor Bailey, the challenge that Land Rover now faces is that it "needs to do a BMW", by doubling sales from 300,000 to 600,000 in 10 years to ensure that the company has a long-term future. That is going to depend on a lot of investment in new models that are "all their own work" as well as facing up to the challenge to develop more energy efficient cars.
McGovern claims that the plans are already far advanced for the programme of new cars that Land Rover is betting its future on. While he admits that the Range Rover has been more difficult to design than the Evoque "as no one wanted it changed, just made better," the new Range Rover Sport that follows has been easier as he feels he has "more permission to stretch it further"; and a lot of the decisions have already been made for the new Defender that, like the DC100 concept shown last year, is going to be "thoroughly modern and utterly relevant".
"The opportunity is great. We are selling 8,000 Defenders a year now. We could be selling 100,000." Yet however much he claims that the success of Land Rover is "never about one person, it's about having the right level of shared vision and passion," that's just a little too hard to believe.
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