The 'most important' car in Jaguar history may be in trouble.
The X-type, which is designed to broaden Jaguar's market reach, is selling unevenly in Europe. It has also fallen short of sales targets in its early months in the USA.
The problems: wrong model mix, poorly timed marketing, and an inconsistent pricing message.
Jaguar expects to sell 100,000 X-types next year. The X-type is the heart of Jaguar's drive to boost global sales from 85,000 to 200,000 - and to go from breakeven to profitable.
But management feels the X-type should have received a better consumer response, a source said.
Premier Automotive Group Chairman Wolfgang Reitzle publicly supports the car. But he is quietly voicing disappointment at the X-type's lackluster reception, the source said.
A Jaguar executive acknowledged the X-type's launch has been troubled. But he said the car is achieving its early objectives.
'Clearly there is a mix issue. Economic conditions are more difficult today, and that's changing consumer habits,' said Doug Speck, vice president of retail operations for Aston Martin-Jaguar-Land Rover North America. 'But we're also seeing a 90 percent conquest rate for the X-type, and that's what this car is supposed to do for this brand.'
Alistair Bedwell, research manager for J.D. Power-LMC in London, offered a different viewpoint.
'For a car in production since February, at this stage I'd have expected an order backlog rather than this,' he said. 'Demand is not what they expected. Sales are off from what they hoped.'
Other analysts are harsher.
'The X-type has some flaws - like it's hideous,' said Steve Saxty, head of automotive consulting for FutureBrand in New York. 'It's not quite what a Jaguar needs to be.'
The wrong mix
The X-type went on sale in Europe in June. Monthly sales were below 2,500 units in the summer, but surged to 4,500 units in September on a one-time gain because of new registration plates being introduced in the UK. X-type sales declined to 3,000 in October, according to estimates by JATO Dynamics.
The X-type must sell 12,000 units in November and December to meet Jaguar's calendar-year target of 25,000 sales in Europe.
Boris Priszlinger, sales manager at Autosalon Schweikert in Pforzheim, Germany, said the X-type's limited model range is a disadvantage. Rivals Audi, BMW and Mercedes-Benz offer station wagons, diesels, small four-cylinder gasoline engines and rear-wheel drive. The X-type's build quality does not match German standards, he added.
'The car is not bad, but detail finish could be better. Negative German press reports did not help either,' Priszlinger said.
Jaguar planned to sell 3,200 X-types in Germany this year, but will be lucky to reach 2,200 units.
Jaguar dealers are slowly getting used to the X-type, said Paul Schinhofen, spokesman for Jaguar Deutschland. X-type customers are trading in cars such as the Audi A4, Mercedes-Benz C class and BMW 3 series - models Jaguar salesmen haven't dealt with before.
Frans Munsterhuis, a large Jaguar dealer in the Netherlands, said the X-type is not a success with fleet buyers.
'With the economy under pressure, many companies are extending existing lease contracts,' Munsterhuis said. 'We may have been a bit too optimistic.'
Frans Dirken, managing director of Jaguar's Dutch importer, said too few X-types have 2.5-liter engines. Buyers in the lower-luxury segment prefer smaller engines for fuel economy and tax reasons, Dirken said.
According to Jaguar spokesman Colin Cook, the X-type's European sales are above forecast, especially in Italy and France.
'We are certainly pleased with the reaction to the car and the way sales are going. We've had some mix issues, but we've rectified those,' Cook said. 'This was the biggest launch ever for Jaguar. I'd say it was a very good launch.'
Slow US start
In the USA, where Jaguar had hoped to sell 3,000 X-types a month, sales have yet to break the 2,000 mark. Jaguar has already started offering lease deals.
Dealers say they don't have the right models in stock. But they believe the X-type will succeed once the model mix is balanced. Despite a massive advertising campaign promoting affordability, X-types are loaded with extras in the USA that add a huge premium to the $30,000 (E33,500) base price.
'People don't think it's a $40,000 car,' a rival distributor said.
Jaguar is making adjustments. In Europe, the X-type will add a 2.0-liter V-6 with front-wheel drive for fleet buyers by spring 2002. But there's a two-year wait for a diesel.
For North America, Jaguar changed the production mix to 70 percent 2.5-liter models.
Analysts say other problems will be harder to fix. The X-type's rear seats are cramped, a major flaw, said Mike Robinet of CSM Forecasting in Northville, Michigan, USA.
He said: 'It's an unwritten law that you should be able to sit comfortably in a Jaguar.'
- Dorothee Ostle and Jim Henry contributed