After a turbulent couple of years, what sort of shape are Jaguar and Land Rover in for 2023 and beyond? Andrew Jago, general manager of fleet and business operations for the two brands, explains all to John Challen.

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How would you sum up 2022 for Jaguar Land Rover?

It was a year of transformation for us in the fleet and business space. In January, we moved all of our key accounts to a direct sales model and introduced localisation as part of the change. As a result, it means out retailers became the sole source of distribution for our vehicles, instead of using-third party logistics providers. We wanted to ensure that there was a better relationship between our retailers and the end user drivers, for them to better tend to drivers’ needs.

Why make the changes now?

The feedback has been overwhelmingly positive from all of three stakeholders, so retailers, customers and the leasing companies, which proves it was a good time to make the change, with all of the supply challenges – as well as other issues – there’s never a good time to make huge decisions, but my view is don’t waste a good crisis! Therefore, it was a perfect moment to work to implement that change.

It’s all change on the vehicle line-up too. How has that been received?

We continue to be the UK’s largest automotive manufacturer and we’re well positioned to service the needs of our fleet business customers in the luxury market. We had a phenomenal year, thanks to new Range Rover and Range Rover Sport. The plug-in hybrid proposition obviously generated a lot of interest, thanks to the 5% BiK: 57% of our Range Rover Sport order bank is PHEV and 35% of Range Rovers. We’re seeing a lot of demand in the salary sacrifice space because, again, 5% tax makes that appealing.

How did the fleet-related announcements from the Autumn Statement impact the company’s predictions?

Two thirds of plug-in vehicle demand is coming from business customers, so it’s still very much reliant on the fleet sector. From the Autumn Statement, the fact that the benefit in kind landscape was confirmed for the five fiscal years from 2023/24 was great news for fleet, because our retailers can take our products to market with confidence, in an environment where there’s volatility and uncertainty. Being able to sign off on three-, four- or five-year contract hire business and fixing the payments, is a real plus.

What does the future look like for established EV products within JLR?

I-Pace continues to be a real staple product for us. Despite all of the noise around supply and volatility, it’s the only product in its segment that was able to be supplied from order to delivery within six months consistently. That was the case throughout the whole semiconductor crisis and it continues to be. We’ve taken very strong steps to protect supply of that product and make sure that where we’ve got customer demand, we can support it with delivery.

Elsewhere, are you over the worst of the vehicle shortages from 2021/2022?

Supply is definitely improving and we’ve been delivering cars to drivers who have been waiting for some time. For some Range Rovers, that wait might have been a year, but production numbers for the final months of 2022 were up a lot. We’re probably in a better position than some of our competitors, because of the new products and the desirability of the brands we have. It might not look good to some people, but it’s driven entirely by by the supply restrictions. I would say we’ll probably see a more robust position on the corporate side, rather than private, during the first part of 2023.

How much of the demand is drivers who are planning ahead, bearing in mind the long vehicle waiting lists?

I think there is an element of that happening, but we’ve also got new customers coming to us. Most our Jaguar Land Rover drivers are in finance agreements of some sort, so we try and make sure that we have the right conversations at the right time to manage their expectations.

We’ve seen a lot more flexibility with the leasing companies, who haven’t been tying drivers or fleets into a new contract if they just wanted to extend the deal for a year. It helps that Res are strong, which means there is more willingness than there was at the start of the supply challenges.

But we have a few drivers who think they can still walk in and get a car the next day! That’s clearly not the case but, again, it’s about having the right conversation. with them. And, most importantly, if they’re in a finance agreement, making sure we are fair and transparent.

Has the situation become a ‘new normal’?

To start with, people were very sceptical and didn’t really think they would have to wait a year. But now it’s become pretty standard across the industry, so their expectations have been managed more effectively. The key for us is that any customer with an order in the system has contact from the retailer at least once a month, even if there’s no news – just to make sure they haven’t been forgotten. This is about knowing the customer, delivering a level of service and engagement and communication to make them feel that we value their business.

What level of enthusiasm or willingness are you seeing from fleets to shift to PHEVs and EVs?

What I’ve seen, as a result of the supply volatility, is a lot of companies that made a clear policy shift towards zero emission, had been more willing to relax that and bring PHEV back in, because it’s just added more choice. It’s also given more flexibility on lead times. But here are very few fleets now that haven’t started to move – obviously the BiK rates have driven that and obviously you can see that’s where the demand in the market remains.

For us, I-Pace was transformational. But, as we bought out more plug-in hybrid products, it has made a real difference. With Range Rover Sport and Range Rover PHEV are proving popular additions, while for Discovery Sport, almost three quarters of orders are PHEV. So PHEV acceptance of our model range is huge.

What’s more, we’re seeing more conquest business, so I think the appeal of our products – especially the plug-ins – is really helping us. That gives us a lot of confidence as we introduce more battery electric products into the range over the coming years.

Are drivers using PHEVs ‘properly’, or just taking advantage of the favourable BiK rates?

While I don’t have any data on the specifics, what I can tell you is that a lot of corporate policies with mileage reimbursements – whether or not have a fuel card – have made it very unattractive to not to plug the car in. So, if you like don’t plug it in, you’re effectively losing out on your mileage reimbursement. A lot of the corporate providers of company cars – and even those on salary sacrifice with the mileage reimbursement – have a very clear reimbursement rate.

Land Rover has some great product coming through, but what’s the latest Jaguar news?

Despite what some people might think, it hasn’t been forgotten! I think you’ve got to look at it in the context of the market data not necessarily reflecting the demand, much of which has come from the Land Rover side. We’ve only had a certain amount of components and when you’ve got new models – like we had with Range Rover – you need to ramp up production of that.

In terms of the product proposition itself, the I-Pace isn’t the oldest model on the market, but because it was early in its segment, people perceive it as such. But in terms of its range, which has been enhanced since launch, it’s still in the top third of the segments it competes in. In terms of driving dynamics and attributes, it’s still one of the best products out there.

When can we expect to see new Jaguar products?

We introduced the F-Pace for MY24 at the end of 2022, which included battery technology in the PHEV, which has improved the range and moved it into the 8% BiK band. Over the next five years, that caps out at 11%, which is less than the 12% it is today. Beyond that we’re working on a total renaissance of the Jaguar brand for 2025, so there’s a lot going on behind closed doors.

We’ve taken the opportunity to look at the whole brand from a blank sheet of paper. Rather than fitting the existing battery technology around our existing portfolio, we’re taking the time to ask what Jaguar actually means and what it looks like in the future.

What will Jaguar’s future line-up look like?

We know internally, but we haven’t confirmed the number of models yet. They are like nothing you’ve ever seen. There’s a lot of eagerness to understand what’s going on – and it will be pretty ground-breaking when you see it.