It’s been a tough year for Jaguar Land Rover, the UK-based carmaker, as the recession hammered sales and its CEO David Smith quit unexpectedly. But its Indian owner Tata finally had some good news to report today: not only did January see a big upturn in sales (it sold three times as many Land Rovers and twice as many Jags as the same month last year), but it’s also persuaded Carl-Peter Forster, the ex-European boss of General Motors, to take Smith’s place behind the wheel. In some ways Forster is joining at a good time, with sales apparently back on an upward curve – but he still has some unenviable decisions to make...
Things do seem to be looking up at JLR, after a rotten 2009 in which sales of Land Rovers were down 16%, and Jaguar sales plummeted by almost a third. Tata said today that Land Rover sales more than tripled in January from the same month last year to 13,295. Jaguar sales didn’t fare too badly either: it shifted 2,974 units, which is about twice as many as in 2008. Good news for JLR and its Indian owners (although the eco-warriors among you might beg to differ).
It’s also found a highly-regarded replacement for Smith, who quit abruptly three weeks ago in what looked like a disagreement over strategy. Carl-Peter Forster is a German veteran of the motor industry, making his name at BMW before going on to run GM’s European operation, including Vauxhall (so he should know about running iconic UK brands). Tata has put him in charge of its entire car division, with special responsibility for JLR.
But although JLR may be through the worst of its sales slump, there will still be some pretty thorny issues in Forster’s in-tray when he arrives in the West Midlands. Further cost cuts are required, and workers have already been told to expect the closure of either the Land Rover plant in Solihull, or the Jaguar plant in Castle Bromwich. Whichever one he goes for, any closure is unlikely to win Forster many fans in the short term.
And then there’s the longer term stuff: can he turn JLR into a profitable going concern, particularly when the big gas-guzzlers in which the company has always specialised appear to be going out of fashion?
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