MT Interview: Jaguar Land Rover CEO Rawdon Glover

Over the past four years seismic restructuring has been underway at Jaguar Land Rover (JLR). Under Tata ownership, the group has been investing billions in new product across both brands, and that’s ongoing.

It is also well advanced on a major revamp of the dealer network to streamline its structure and bring in common ownership of the two brands in each market territory, implementing a dual-brand ‘Arch’ concept for how dealerships will look.

This year there has also been internal restructuring within JLR involving the brands’ global sales, marketing, service and public relations activities. That has seen UK managing director Jeremy Hicks move on to a new position as global market performance director.

Since July, his successor, Rawdon Glover, has been JLR UK’s new managing director, after five years as global director for services. He joined Jaguar Land Rover in 2013, having previously held senior director level roles at the Volkswagen Group in sales, marketing and aftersales in the UK and overseas markets, during a career in automotive spanning two decades. With a career path through the VW Group and JLR, Glover’s route to running the UK operation has been remarkably similar to his predecessor’s.

Motor Trader caught up with him at the Paris Motor Show, where Jaguar’s electric I-Pace was a crowd-puller alongside the new plug-in hybrid Range Rover and Range Rover Sport P400e PHEVs.

When the network overhaul was announced in 2014, it planned for 117 Land Rover and 84 Jaguar sites to reduce from a combined total of 201 down to 138 run by just 35 partners. Ongoing JLR dealers were investing an overall £1bn in their UK premises, but the network was shedding some who did not want to make the investment of between £1m and £20m per site.

So how is the network revamp going? Currently there are 160 retailers and that will now be the size of the network going forward.

“In terms of bringing the brands together, the plan is pretty much done,” said new UK managing director Rawdon Glover. “We have next to no open points. We still have a small number of stand-alone Land Rover and stand-alone Jaguar retailers, and we have 123 that are combined.

“As for progress on the work, we currently have 51 retailers completed with the new design, including sites in Watford, Leeds and Inverness. Another 21 sites are in build, eight of which will complete by the end of this year, so we are well on track for our planned 2021 completion. By then about 70% of the new sites will be dual-brand, up from 33% today.

“Any change is an upheaval, but those that have done it with us are absolutely convinced it’s the right thing, and those that are on the journey are all pretty much on the bus and we’re heading in the right direction. This will be the quickest implementation of a new corporate identity, and the most significant expansion of capacity, that any brand in the UK has ever undertaken.”

Of the two brands, Jaguar has the tougher journey. Land Rover has been a highly profitable franchise for at least five years, but the same cannot be said of Jaguar, which has been a loss-making franchise for many dealers in recent years. So how is that going?

“Yes, Land Rover profitability is very strong, Jaguar profitability we are still working on but it’s improving. We have some Jaguar retailers making very good money, but they tend to be the ones that are spinning all the plates with new cars, used cars and service, all very active. There aren’t many franchises at the moment where you can have a sustainable business with just one of those revenue streams. The days of having a strong business off the back of new car margins are gone.

“Obviously new product helps, and we have a lot coming in at Jaguar with F-Pace and E-Pace and now I-Pace, which is a big focus for us now. It’s still relatively early in the launch phase, but reaction from the press and customers couldn’t be better. We’ve had 315,000 people visit our website, 250,000 full configurations, and orders stretching for the next six months. That’s a nice problem to have. In September alone we had 1,000 requests for test drives, and these are new people not on our list who are coming to us from other vehicles.”

Pulling some across from Land Rover, maybe?

“No, they’re largely conquest, and interestingly first time EV in the main. So the role retailers have is to make sure they properly qualify the customers and ensure they’re confident that an electric car is the right choice.”

The latest National Franchised Dealer Association (NFDA) dealer attitude survey had Jaguar near the bottom with a score of 3.6, compared with Land Rover on 5.4, an average 5.7 and the top performer (Kia) on 9.1. What is JLR doing about that?

“We have a way to go, I think, with our retailer satisfaction. I have been in the chair two months, and one of the first things I have done is sit down with our retail board and said ‘what are the things that are getting in the way of our relationship? What are the things we need to be jointly addressing?’ As you expect in that situation we have a long list of things to work on, and we are working our way through them.”

So what kinds of things are they saying about what irks them? “It’s a whole raft of things. If I have to deal with specifics, we need to become a little bit easier to do business with. Fundamentally we absolutely want the same things. What we’re striving for is an increase in new market share, in used market share, we want to drive their service retention, and do so satisfying customers. I’ve yet to meet a retailer who doesn’t want to do those four things. A lot of it has been stripping back and saying what’s the essence of what we’re trying to do?

“There were certain policies and procedures in place that were possibly seen by the network as a bit punitive, perhaps a bit lowest common denominator in how they were deployed, so all of those things are being looked at. Of that list there were really only two where we felt we’re not necessarily certain we can wholeheartedly agree on this, but we understand what you’re trying to get to, and we can have a conversation about maybe a different way.

It seems to me there are a lot of quick fixes we can put in place.”

JLR has been very reliant on diesel, accounting for 90% of sales last year. Isn’t that a problem in the current climate?

“Where we stand today is at about 80%, and if we look at April to August this year our absolute level of diesel sales was only down one per cent, so we are effectively holding our level of diesel. Our figures indicate that although the fearmongers of doom say diesel is dead, that’s not the case. For us in the medium term, while electrification strategy is forging ahead, we still see diesel as an absolute mainstay of our powertrains.”

I ask Glover would he like to see a scrappage scheme brought back by the government, or look at doing one internally?

“We would like to see a more balanced approach towards diesel, of which scrappage could clearly be an option. At the moment there’s no move to take older diesels off the road and there’s an active disincentive towards vehicles that produce 20% less CO2.

“Would we do it? I have been mulling over that. I’d have to figure out the maths, and I think they’d be quite challenging. It’s difficult to go alone on these things.”

JLR currently has 13 models. What’s coming and what are its investment plans going forward?

“There will be 16 nameplates by 2024 across both brands. Some will be replacement, some new. We have £4.5bn on a year over the next three years going into investments, which is not just new products, but new manufacturing facilities, research and development. We are committed to zero emissions, electrification is our future long-term, so that needs to be invested in, and also other game-changers whether it’s autonomy, connectivity or shared services.

“Later this year we’ll be launching a concierge service in the car, we’re looking to pilot it with the I-Pace, so if there’s a problem we’ll know exactly where you are, we can talk to you. Reliability is still a concern for some owners, and a thorn in the side for retailers, what is being done about that? JLR doesn’t show up well in some surveys.

“The quality of our vehicles is the number one concern at JLR from an engineering and manufacturing perspective. We have had some disappointing results in some surveys and they are taken really seriously. Every one of those surveys is an opportunity for us to learn, our goal is to improve and we’re not there yet, but it’s a number one priority for us.

“I’m new in this job and there are some things that I need to change, some things that the retailers need to do to sharpen their act. For us it’s the old question of two ears one mouth, you need to do as much listening as you do talking. Over the last two months I’ve been doing a lot of that.”

Sue Baker is a journalist, broadcaster and contributor to Motor Trader