If there was a wild card this year, it’s the three-row Range Rover, a layout never before available in the lineup. How is it doing?
The three row is doing very well. There’s a ton of demand for that car. And, you know, we’re doing our best to fulfill it. And thankfully, recently, they’ve started to come in in greater volume. But, yeah, we still have a lot more demand than supply at the moment, which is a good problem to have.
With the Range Rover now in a higher price bracket, have you heard of any interesting trade-ins — something you might not have seen before?
Oh, absolutely. We’ve seen this, and not just on the new Range Rover. Now, as the price points continue to move up for some of our higher trims, it’s certainly not uncommon to see exotics come in on trade.
Does the fast-rising trajectory of electric vehicle sales, particularly luxury models, have dealers feeling upbeat about Jaguar’s future?
I think everybody’s interested to see what Jaguar has coming. The dealers still have not been exposed to too many details. But we’re excited that hopefully that can be the new and best way forward for the brand.
What‘s the No. 1 unmet need JLR dealers face in 2023?
We’ve been constrained on supply for some time now. Thankfully, the demand hasn’t waned. We’re hopeful that in ’23 JLR will be able to work through some of those constraints that, you know, it seems like everybody in the industry has struggled with to some degree. That’s really our biggest Achilles’ heel at the moment. We want more products. The factory knows it and owns it and we’re confident that they’ll help us continue to increase those numbers.
We’re in a unique situation with the Land Rover brand, in particular, because new models continue to come out and the demand hasn’t slowed down. We just got Range Rover Sport. We’ve got the Defender 130. So, new models arrive and there’s a new batch of customers waiting for us, which is great. It puts us in a very fortunate position as retailers.
Has JLR been helping dealers get through these lean inventory times?
We’ve had a fair amount of customers who have gone on to lease extensions. JLR has been flexible with us and trying to do what they can to make sure we’re keeping customers within the brand. JLR’s financial group has worked with us as well on that. You know, there’s still a fair amount that’s out of their control regarding some production issues and timing and arrivals. But I think they’ve done their best to make things work for us as much as they can.
Does JLR require customers to place orders through a manufacturer order bank or website?
JLR does not require that.
How are JLR dealers handling new-vehicle pricing? Is JLR warning dealers about markups and selling vehicles over sticker price?
JLR is encouraging every retailer to do what’s right for the customer and to sell those vehicles at MSRP. You know, there’s certainly accessory sales and things that may bring the numbers above that, but market adjustments and things like that are certainly discouraged.
But it‘s up to a dealer to make that choice?
Absolutely. But it’s a challenging situation for JLR retailers, where, you know, there is such a big secondary market from clients who will take a vehicle and then sell it to someone else in the same day. But ultimately we want to do what’s right for the clients as well. And hopefully the people who are buying the vehicles are those that are going to keep and enjoy them.
Is affordability becoming more of a concern because of inflation and recession fears?
At the moment, it doesn’t seem like it is much of a factor because we’re still in a situation where demand is still significantly greater than supply.
Have JLR’s lower incentives affected sales?
No, I don’t believe so. There are certain models where, I think, in due time it may be something that could be considered. But like we’re experiencing with everything else, it’s just the amount of inventory that we have. I don’t think it makes financial sense for them to offer incentives.
Even though the new electric Jaguar lineup is still around two years away, is JLR adequately advising and providing resources for dealers on how to prepare for the EV rollout, such as installing chargers at each store?
We are certainly in discussions with JLR on the best way to future proof our facilities. And I’m confident that in short order, when more information comes around about Jaguar’s future, that JLR will have best practices and what needs to be done in order to make sure that we’re building a facility or refurbishing our facility to accommodate all future needs.
What’s missing in the product lineup?
When we talk about Jaguar, I think everybody is just excited to see what the future holds. You know, we still have not seen what’s coming. From what I understand, the vehicles are supposed to be a copy of nothing and be like nothing we’ve seen before. So, I think we’re very happy to see how that looks. I don’t know what’s coming on the Land Rover side, but I think we have a really well-balanced lineup, and I think JLR will continue to strengthen the brand.
With limited availability of chips, JLR has been using them in the highest-demand, highest-profit vehicles — Land Rovers. That has dramatically curtailed Jaguar production and sales. Is that frustrating dealers?
I think we would certainly see improved volumes for Jaguar with greater availability of chips. You know, there are certain vehicles that we just don’t see many of, and that limits the opportunity. But what JLR is doing—putting the chips in the highest margin vehicles—makes sense.
With the shortage of new vehicles, is the certified pre-owned program more important than ever? Is JLR helping dealers promote CPO sales?
JLR has a great CPO program. Fortunately, the vehicles are very desirable. So that’s been great for us as retailers that we have a fair amount of demand on the preowned side to buy those CPO vehicles. JLR has always supported that program and understands how important it is.
Does JLR have brand-specific tools for digital retailing? Or can dealers choose whichever they want?
There’s a range of approved tools that are available and, in my opinion, they cover the most popular digital retailing tools that dealers would use.
How is leasing?
We’ve seen the leasing volume decline primarily because the value of the vehicle is so strong. Customers can feel comfortable purchasing a vehicle as opposed to leasing it and still have the ability to get out in a short period of time without having to worry about the residual risk. Fortunately, as the brand, Land Rover products hold their value very well, and I think that level of comfort has reassured consumers that they are just as safe buying cars as they are leasing them.
Longer term, though, could the decline in leasing crimp the supply of CPO vehicles?
I haven’t thought about it, but I totally get what you’re saying. There are other sources that we can pull from, such as loaner fleets. Thankfully, as a brand, we have great loyalty, but we do capture a good amount of on-brand trade, but certainly with leasing volume decreasing we could end up in a more challenging situation for future inventory on pre-owned.
