Land Rover says 'no' to repositioned models

Land Rover will not attempt to emulate Jeep's sales success with the latest Grand Cherokee. The surge in sales for the American SUV has caught many in the industry by surprise, but the Jeep's gains haven't come at the expense of Land Rover sales, says spokesman James Scrimshaw.

Year to date sales of every model in the local Land Rover range are improved from the same period last year and the introduction of the Range Rover Evoque to Australia is bound to fire up the company's sales to greater heights before the end of 2011, despite supply constraints at the Halewood factory in the UK.

"I think it's going to be a good six months before we get full supply — the sort of supply that we want," Scrimshaw told motoring.com.au during the local launch of the Evoque.

While the Evoque (pictured), which has generated a lot of interest among local consumers, is not directly comparable with the Grand Cherokee, could it achieve the same sort of unanticipated sales results the Jeep has achieved this year? Scrimshaw believes it certainly has the potential to outperform Luxury SUVs in the same ballpark for size.

"I believe that in that segment... that we will. We will have that opportunity of topping that segment, but it really depends on how many vehicles we can get — and at this point we really don't know what that will be."

But Scrimshaw emphasises that the Evoque is not a competitor for the Grand Cherokee and parallels between the two should not be made.

"We're more sitting against the [BMW] X3s and the X1s... I still see the Discovery 4 more... [a competitor to] Grand Cherokee... not the Evoque."

Given the Grand Cherokee's resounding success in the market with the introduction of the new WK generation this year, would Land Rover consider fielding Discovery 4 variants priced lower, to pick up buyers not currently in the luxury SUV segment, but looking for a heavier offroader?

"[Grand Cherokee] is selling very well, but at the moment — Discovery 4 — we're selling every vehicle we can get into the country," Scrimshaw responded. "We're hitting all our targets and exceeding our forecast on a monthly basis, so at this point in time we believe we're in the right part of the segment [with] the right pricing."

Even if the Discovery itself were losing sales to the Jeep, Land Rover wouldn't be in much of a position to tackle the Grand Cherokee head on. Quite simply, Land Rover cannot adjust Discovery's pricing to match the entry-level point of the Grand Cherokee.

"[Jeep] is in the competitive set when we consider all vehicles," said Scrimshaw. "We are a bit above where they are and their vehicles are priced very keenly; it's something that we just can't get to at this time.

"They are definitely attracting a different customer... the sales are showing that [the Grand Cherokee] is doing the right job. We'd all like to sell more cars, but at the moment Discovery won't be changing its position from where it is."

Would moving downmarket, as in Jeep's case, affect exclusivity and brand cachet — and is this a motivator for Land Rover remaining upmarket? Scrimshaw chooses not to comment on Jeep's situation, but notes that Land Rover's position — using the Discovery as an example — is more or less determined by buyer choice and the market position of the smaller Freelander 2.

"I don't think to go down to the $50,000 mark is something that we need to do with Discovery, because it's selling quite comfortably where it is. It's not exactly a cheap vehicle for us to purchase; I don't think we could ever get to that point. And that's sort of the territory where Freelander 2 sits... so having Discovery down there as well just wouldn't make sense for us.

"We do have a vehicle under $70,000, but most of the volume is around the $85,000 to $90,000 mark on that vehicle and we're comfortable [with that]."

There is an opportunity for Land Rover to tackle the Grand Cherokee head on, but it's out of left field and about three or four years in the future — and there are some unknowns involved in it. Land Rover unveiled its DC100 concept vehicle two months ago at the Frankfurt motor show. The design study is not intended to be a set-in-concrete preview of the next Defender, but certainly set tongues wagging on its debut. For many traditional Land Rover enthusiasts, the DC100 was not what they expected and nor was it what they want, but according to Land Rover Australia's Marketing and Public Affairs Manager, Tim Krieger, the DC100 has been a hit with women in particular, and buyers in their thirties or younger also.

While the LRX design concept from two years ago was visually very close to the production Evoque, the DC100 is a radical reinvention of the traditional Land Rover and may not be anything like the eventual series production successor to the current Defender. But one thing is certain from the concept vehicle; the production vehicle will be markedly different from the vehicle it supersedes.

The concept also hints that Land Rover plans to broaden the market appeal of its workhorse model, with the utilitarian DC100 complemented by the DC100 Sport. Will the Defender replacement achieve for Land Rover what Grand Cherokee has done for Jeep? If the Jeep has successfully made the move downmarket, can the Defender replacement move up into the luxury echelon without shifting its entry-level position? In other words, can the Land Rover have a foot in each camp too?

"Absolutely," Scrimshaw replied. "There's still a lot of work to be done on exactly what model we take in Australia; we're four years away from the final, finished product — and we've still got a bit of time to plan exactly what specs we take. There's going to be different levels of low-specification, high-specification, but we're definitely hoping it's something that appeals to a lot more people in the current Defender, where we have 10 derivatives of Defender.

"We're hoping that this... is definitely going to be something... priced not too far from the current one. At the moment that is sub-$50,000. We'd have to be around that segment, so it's not too far from where Jeep is.

"It definitely needs to have a lot more creature comforts, because the Defender is built on a fairly old platform and it hasn't changed for a long time. It still doesn't have airbags and a few things like that. In the future it needs to be a lot more comfortable. It needs to be able to seat five adults comfortably and, at the moment, that's not the same case where Defender is.

"It does need to be flexible and more obtainable to many more people. And also we want to attract a younger market with that vehicle as well, because we do want to do at least three times the [sales] volume that we're currently doing with the Defender."

To put that in perspective, the current Defender has sold 370 units in Australia for the year to date. Trebling that figure would give 1110 units — against 1357 units sold during the same period by the vehicle in the market closest to a DC100-style new-age Defender, Toyota's FJ Cruiser. As an observation, those figures are chicken feed for Toyota, but on par with other Land Rover models (1049 for Freelander 2, 1340 for Range Rover Sport and 1769 for Discovery) — and therefore achievable.

How will Land Rover find a way for the post-DC100 Defender to appeal to younger buyers? Will the company offer the Defender replacement in two wheelbases, as at present — with a modernised 90-inch wheelbase model for the recreational drivers?

"The first prototype that they brought out was the 100-inch wheelbase, which sort of sits between the 90 and the 110..." Scrimshaw replied. "A lot of Land Rover enthusiasts believe that is the ultimate wheelbase and they're very happy to have that wheelbase there. I know there are other wheelbases available, so Brett [Lewis-Driver, Land Rover Product Manager], being in the product planning side; that's what he'll be looking at in the future. But we're still evaluating exactly what we take in the market; we'll have options, like we do now with Defender. Exactly what we take in the market, that's still being decided. We're not at the finish line yet."

While the Defender replacement is still some way off, the whole issue may be academic for Land Rover Australia. If the Evoque proves as popular as the importer expects (and the Grand Cherokee's sales were also initially hampered by supply constraints), Land Rover may be perfectly satisfied with its market penetration as is.

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