Jaguar Land Rover: Inventory Pressure, Vicious Circle?

08/21 2024 567

As Mercedes-Benz and BMW have seen ups and downs in the Chinese market over the years, and Lexus has gone from price hikes to discounts that seem to have no end, Jaguar Land Rover, which has struggled in recent years, has yet to shake off the stigma that hangs around its neck. According to data from the China Passenger Car Association, Jaguar Land Rover sold a total of 29,000 units in the first half of this year, a year-on-year decrease of 44.27%, marking the lowest figure for the same period in nearly five years. Furthermore, the China Automobile Dealers Association released the results of its "Automobile Dealer Inventory" survey for July 2024, revealing that Jaguar Land Rover had an inventory coefficient of 2.55, higher than the average inventory coefficient of 1.38 for high-end luxury and imported brands, and the highest inventory depth among all brands in July.

But life is full of misfortunes that seem to come one after another. We contacted a Jaguar Land Rover dealer in Beijing and found that domestic models such as the Range Rover Evoque and Discovery Sport are sold at significant discounts, with dealers losing an average of RMB 100,000 for each unit sold.

The stark contrast between the plight of domestic dealers and Jaguar Land Rover's profitability in the global market raises concerns that a similar scenario to the one that unfolded with Porsche in May, where dealers protested against the automaker, could happen to Jaguar Land Rover. So, has the decline of Jaguar Land Rover in China been due to a lack of Chinese consumer interest?

Image source: "Wo Ju" (Dwelling Narrow)

Jaguar Land Rover first entered China in 2003, and by 2005, sales in China accounted for just 1% of the company's total sales. However, a turning point occurred in 2017, when Jaguar Land Rover sold a cumulative total of 146,000 units in China. At that time, a line from the TV series "Wo Ju" (Dwelling Narrow) stating, "Men who drive cars, those with passion, all dream of owning a Land Rover," propelled Jaguar Land Rover to new heights.

Industry insiders suggest that the root cause of Jaguar Land Rover's declining sales is quality issues, particularly with its electronic systems. There is a common saying online that Land Rovers are difficult to repair, and their maintenance costs are relatively high compared to their peers, which has been a source of criticism.

Image source: Visual China

In conclusion, just as the Range Rover cannot be surpassed, Jaguar Land Rover will not surpass its peak performance again. Nowadays, Chinese consumers prefer to focus on new players in the market rather than turning to the so-called "old aristocracy" of Jaguar Land Rover. This is indeed something to reflect on. Shouting slogans about rebuilding the market in the future is not enough; action is required.

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