Picture source: Dugou

Under the pursuit of independent high-end brands, traditional second-tier luxury brands are facing increasing difficulties, and have even reached the point where they have to resort to layoffs to "survive".

Recent media reports indicate that Jaguar Land Rover's Integrated Marketing Services & Sales (IMSS) is embarking on a layoff process, with a potential layoff ratio exceeding 50%. Almost all senior managers and above in the marketing department are affected, and even remaining senior managers have to accept demotions.

This sudden news of large-scale layoffs undoubtedly raises concerns about Jaguar Land Rover's future survival in the Chinese market, where its current situation is not optimistic. According to Autohome data, within the past year, Jaguar brand sales have totaled only 20,151 units, with an average monthly sales of less than 1,700 units; Land Rover brand sales have totaled 25,011 units, with an average monthly sales of just over 2,000 units.

The pressure on sales may have prompted the company to take action against its employees. However, Jaguar Land Rover China has responded to media inquiries by stating that IMSS is indeed undergoing structural adjustments and personnel optimization, but that the reports of "large-scale layoffs" are untrue.

1

Rumors of Large-Scale Layoffs ●

Jaguar Land Rover is a British automaker owned by India's Tata Motors, with two top luxury brands under its umbrella. Jaguar is a leading manufacturer of luxury cars and sports cars, while Land Rover is a global manufacturer of premium all-terrain 4x4 vehicles.

In 2010, Jaguar Land Rover China was established, marking its official entry into the Chinese market. Two years later, a 50:50 joint venture called Chery Jaguar Land Rover Automotive Co., Ltd. was established between Jaguar Land Rover and Chery Automobile Co., Ltd., launching an "accelerated" development model in China.

To further enhance its presence in the Chinese market, in May 2014, Chery Jaguar Land Rover and Jaguar Land Rover China jointly established the Integrated Marketing Services & Sales (IMSS) and reached an agreement on sales channels, merging the sales of imported and domestically produced vehicles.

It is IMSS that has been hit by rumors of large-scale layoffs. According to media reports, the layoff ratio at IMSS may exceed 50%, with almost all senior managers and above in the marketing department being affected, and remaining senior managers accepting demotions.

Furthermore, IMSS has set up a rapid resignation zone, where employees receive a meeting invitation after work and are required to sign contracts and complete material handover procedures upon entering the company the next day, allowing them to leave the same day. Regardless of whether they sign the contract or not, once an employee enters the negotiation room, they will suddenly find that their email and access control systems are no longer functional upon leaving.

Upon the release of this news, widespread discussions ensued. However, Jaguar Land Rover China promptly responded to the rumors, acknowledging that IMSS is indeed undergoing structural adjustments and personnel optimization but denying the claim of "large-scale layoffs."

According to The Paper, Jaguar Land Rover China stated that the company has recently initiated a series of operational model and organizational structural transformations in China, aimed at enhancing organizational competitiveness while accelerating the implementation of its global "Destination Zero" strategy and the smooth rollout of its new joint venture model.

These measures were reached through in-depth discussions and consensus between Jaguar Land Rover and Chery Automobile, with the goal of integrating, empowering, and improving efficiency within the existing organizational structure and Chery Jaguar Land Rover.

Specific measures include establishing localized operational teams for the four major brand families of Range Rover, Defender, Discovery, and Jaguar under IMSS, optimizing functional settings; and based on the new strategic planning of the joint venture and the product layout of the "Freelander," Chery Jaguar Land Rover will further integrate its R&D, design, procurement, and other departments with the parent companies, enhance resource sharing, and ensure a talent pool for electrification and intelligence.

It is evident that Jaguar Land Rover's current adjustments are primarily aimed at accelerating its transformation in the new energy era. However, whether the adjusted new model can bring fresh momentum to the brand and the joint venture remains to be verified over time.

2

Facing Severe Challenges ●

Jaguar Land Rover was once the first luxury brand to surpass the 100,000-unit sales milestone in the domestic market after BBA, with peak annual sales in China nearing 150,000 units, earning it the title of "leader" among second-tier luxury brands.

Data shows that in the early years of its entry into China, Jaguar Land Rover performed exceptionally well, jumping from 26,100 units in 2010 to 73,000 units in 2012. In 2012, Land Rover's sales in China surpassed those of Lexus and Volvo, ranking fourth in the luxury car market, trailing only BBA.

Since then, Jaguar Land Rover has dominated the Chinese luxury car market, with the "BBA+JLR" quadruple threat widely recognized. At that time, buyers had to pay a premium of 100,000 to 200,000 yuan to take delivery of a Land Rover, making dealerships highly profitable.

In 2014, Legal Weekly reported that certain Land Rover 4S stores required customers to pay an additional tens of thousands of yuan to purchase certain Land Rover models, noting that this practice of price markups violated relevant laws and regulations such as the Price Law and the Law on the Protection of Consumers' Rights and Interests.

However, this did not deter consumer enthusiasm. In 2017, Jaguar Land Rover reached its peak in China, selling a total of 146,000 new vehicles that year, accounting for nearly a quarter of its global market share, making China its largest single country market globally.

Yet, just a few years later, its position in the domestic market has undergone a drastic change. It is no longer even remembered as a contender among second-tier luxury brands, let alone as a top player.

According to Autohome data, in September of this year, sales of the Jaguar and Land Rover brands were only 2,028 and 1,615 units, respectively; within the past year, cumulative sales of the Jaguar brand were 20,151 units, and those of the Land Rover brand were 25,011 units. Such performance makes it difficult for Jaguar Land Rover to compete with domestic emerging brands.

Moreover, Jaguar Land Rover's inventory issues are also severe. According to survey results released by the China Automobile Dealers Association, in July 2024, Jaguar Land Rover's inventory ratio was as high as 2.55, far exceeding the average inventory ratios of 1.38 for high-end luxury and imported brands and 1.63 for joint venture brands, ranking highest among all brands. This undoubtedly increases sales pressure on dealerships, making it difficult for them to turn a profit.

Regarding resale value, in the 2023 China Automotive Resale Value Rankings released by the China Automobile Dealers Association, Jaguar Land Rover was absent from all lists, including those for mid-sized cars, large cars, mid-sized SUVs, and large SUVs. Only the Range Rover PHEV appeared in the top ten for PHEV resale value.

Over the years, the once-leading second-tier luxury brand has fallen into a marginalized position. For Jaguar Land Rover, layoffs and optimizations can only alleviate short-term cost pressures; more importantly, it must accelerate its transformation and boost sales.

Author | Bai Yuan

Source | CarVisibility

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