Jaguar Land Rover bets on entry level luxury cars

Jaguar the recently incorporated as Jaguar Land Rover firm is betting the future of its brand on a new family of entry-level luxury vehicles to challenge BMW, Audi and Mercedes-Benz, driving the classy but largely under-performing British marque into fast-growing, high-volume segments. The company is a subsidiary of the Indian automaker Tata motors.

The new vehicles will be made from aluminium on the production lines under construction at its Solihull plant, previously used solely to manufacture Land Rover models, creating around 1,500 new jobs, people with knowledge of the plans told the Financial Times. The new cars will be based on a completely new platform architecture and would be the first fully designed by Jaguar Land Rover under the ownage of Tata Motors.

The new models will place Jaguar into the fast-growing luxury compact and SUV segments that are far outpacing overall premium sales, and give it more firepower in the key Chinese market, where Land Rover’s cheaper models, the Evoque and Freelander are the company’s best sellers.

“This is a massive leap forward for Jaguar,” said one person briefed on the developments by Financial Times, who declined to be identified as the plans have not yet been made public. “It’s the big investment that the brand desperately needs.”

Jaguar Land Rover, the UKs leading manufacturer of premium luxury vehicles has sold 210 190 vehicles during the first six months of 2013, an increase of 14% compared to the same period last year. This result was supported by a positive performance in June with sales up 7% globally.

The decision to shift Jaguar brand, known for its two-seater sports cars beloved of British prime ministers, into the entry-level luxury market follows the dramatic success of Land Rover’s Evoque model, a compact, cheaper version of a traditional Range Rover that triggered a three month long global waiting list and accounts for more than a third of the brand’s global sales. JLR currently offers its Range Rover, Range Rover Sport, Jaguar XJ, XK and F-Type models using innovative aluminium technologies, and the company sees the new Jaguar range as confirmation of its leadership in the budget segment.