LR3 Market.

[Snagger]

4wd utility vehicles will always be needed by farmers, emergency services, electricity, telecoms, gas and water companies, large scale construction companies, animal welfare organisations, national park rangers, land scapers/repairers, outdoor activity organisations (like shooters) and, of course, the military. There will always be a healthy market, but LR seem to be trying to arrogantly rise above them. They seem to have become accutely snobbish of late - the L322 was always going to be a sumptuous vehicle, but the D3's evolution into the D4 has gone upmarket and up-cost, and is now in the RR bracket. The Freelander 2 is now occupying the price band that the Discovery was originally meant to fill, but is nowhere near as capable, so will lose potential Discovery class buyers. Meanwhile, the original Freelander level is now empty. I can't help but feel that the management have pressed the self-destruct button.

 

[R_Lefebvre]

I agree there will always be a demand for utility products. The problem is that that market will be won by a low-cost player. The engineering is simple, as is the technology to produce it. It will be done in a low cost country.

Land Rover was never going to be able to produce those vehicles in the UK with the existing facilities, work force, and overhead they have. They had to move up-market to be able to make a profit.

became the most profitable brand in Ford's stable.

How do you justify that statement? Even Ford can't figure out where they're making a profit or not.

 

[michaelgroves]

4wd utility vehicles will always be needed by farmers, emergency services, electricity, telecoms, gas and water companies, large scale construction companies, animal welfare organisations, national park rangers, land scapers/repairers, outdoor activity organisations (like shooters) and, of course, the military.

For the vast majority of these needs (possibly military excluded), can you say Ford Transit? Or Mitsubishi L200? "Simplicity" costs more than volume production - that's one reason other vehicles are vastly bigger sellers than Defenders.

I'm not arguing that Land Rovers are crappy trucks - just the opposite. I'm arguing that their traditional roots (highly capable, field-serviceable trucks) is an untenable business model in today's world. Sadly.

 

[R_Lefebvre]

Interesting story here:

Car sales were up nearly 32% in the UK in October, but that's NOTHING compared to Rover's numbers...

Land Rover sold 2855 vehicles in October, 2009, which marks an astounding 89% increase in sales overall from October 2008. Even if you're still not convinced that the economy is finally on an upswing, don't try and argue doom and gloom with a Rover salesperson.

ALL of the models saw a rise in sales with Defender up 25%, Freelander 2 up 55 %, Discovery up 112 %, Range Rover up 43% and the Range Rover Sport - wait for it - up 210%!

John Edwards, managing director, Land Rover UK, could not remain quiet: “It’s great to see the market up over 30 percent and we’re excited to achieve an 89 percent rise in October versus last year. It demonstrates what an outstanding success the new 2010 model year vehicles have been and proves the importance of having new products in an ever competitive market.”

Land Rover currently sells in over 170 markets around the world. The UK is currently Land Rover’s largest market, but now that they've been introduced into the lucrative Indian market, that may soon change... for the better. Looks like Tata Motor's little investment is starting to pay off, big time!

There *is* a demand for these cars. Not sure what the numbers look like in the US though... because LR cannot survive on UK sales alone.

 

[nwoods]

The UK is currently Land Rover’s largest market...

Thats interesting. I once had the opportunity to sit down with the senior designer of the LR3/D3. I asked him a few questions, (like what they were thinking with the exhaust routing!), but also about the rear lift gate configuration that seems to most benefit left hand drive models. I asked him why LR doesn't reverse it on right hand drive versions. His response was that the US was a much more important and larger market, thus left-hand drive was their focus. This was in 2005.

 

[nwoods]

How do you justify that statement? Even Ford can't figure out where they're making a profit or not.

Rob, I don't have time right now to demonstrate the research on this, but should you choose to do so, the information is publically available. It was collected from UK sources, the LR blog site (now defunct), Autoblog, and Ford's press site.

 

[Snagger]

I agree there will always be a demand for utility products. The problem is that that market will be won by a low-cost player. The engineering is simple, as is the technology to produce it. It will be done in a low cost country.

Land Rover was never going to be able to produce those vehicles in the UK with the existing facilities, work force, and overhead they have. They had to move up-market to be able to make a profit.

That's absolutely correct. But why not move Defender production to South Africa? they were already assembling CKD kits, so why not go one step further and have them build up the axles and gear boxes too?

 

[galen216]

That's absolutely correct. But why not move Defender production to South Africa? they were already assembling CKD kits, so why not go one step further and have them build up the axles and gear boxes too?

Because the union will never let that happen.

 

[michaelgroves]

I am pretty sure the union couldn't stop them. It's an Indian company - if they wanted to move production elsewhere, what's to prevent it? But South Africa isn't that productive (and therefore not that cheap) due to labour/political issues. I would have thought India would be the logical place to go, for several reasons.

 

[Blueboy]

Because the union will never let that happen.

they let it happen for Brasil.

that was the real shame when Ford decided no more production in Sao Paulo.

 

[R_Lefebvre]

Rob, I don't have time right now to demonstrate the research on this, but should you choose to do so, the information is publically available. It was collected from UK sources, the LR blog site (now defunct), Autoblog, and Ford's press site.

Don't forget I worked for Ford while they owned LR. I would be interesting to see how you determined how profitable LR was, given Ford itself didn't know. They do not amortize the development cost of vehicles into different models which consumed that development money. If the LR3 and the 2004 F150 both cost $4B in R&D, but the LR3 sold 100,000/yr and the F-150 sold 600,000/yr. Even *if* the LR3 showed more profit on the operations side (which it didn't) it would lose once you factor in it has 6 times as much development cost per vehicle.

Thats interesting. I once had the opportunity to sit down with the senior designer of the LR3/D3. I asked him a few questions, (like what they were thinking with the exhaust routing!), but also about the rear lift gate configuration that seems to most benefit left hand drive models. I asked him why LR doesn't reverse it on right hand drive versions. His response was that the US was a much more important and larger market, thus left-hand drive was their focus. This was in 2005.

You met Dave? Interesting.

A little tricky to track down LR sales figures lately, but I found some. Land Rover and Jaguar *combined* only sold 3160 in the US in August. It's not exactly clear that the US is their most important market, though they may want it to be.

http://blog.leasetrader.com/archive/2009/09/02/UPDATE-AUGUST-2009-U.S.-light-vehicle-sales.aspx

I am pretty sure the union couldn't stop them. It's an Indian company - if they wanted to move production elsewhere, what's to prevent it? But South Africa isn't that productive (and therefore not that cheap) due to labour/political issues. I would have thought India would be the logical place to go, for several reasons.
Today 02:41 PM

Now there's not much they can do. But when Ford owned them, it was going to be a considerable problem due to Ford operations also in the UK.

Regardless of labour relations, whoever owns them would have trouble collapsing UK assembly operations due to the costs of doing so.

 

[modelbuilder]

I'd take Nathans word for it. He is very knowledgeable on the subject of LR. I would go as far to say that he is Expo's resident LR expert.


.

 

[nwoods]

I'd take Nathans word for it. He is very knowledgeable on the subject of LR. I would go as far to say that he is Expo's resident LR expert.


.

NO! I appreciate your kinds words Joe, but I must quickly and upfrontly say that I am definately very limited in my knowledge of LR lore. My information is limited only to LR3 related aspects, and perhaps a scratching of organizational gossip through a few (formerly) well placed friends. When it comes to canonical knowledge of Land Rovers, I am not even on the horizon.

 

[nwoods]

You met Dave? Interesting...

I think that might have been his name, but too be very honest, I don't remember. He was a thin, British guy, early 50's or late 40's. Very nice but confident type. I was gathered with a few other invitees at the PAG design center and he was inquisitive about my truck and my blog and thoughts on the LR3. In return, my questioning revealed that his title was something like "chief designer of the platform" or some such title. I was far more interested in the actual conversation than the introductions.

As for my comment about LR being profitable, I was not talking about LR3's specifically, but the brand as a whole. It was well publicized when LR first turned a profit under Ford's time at the helm, and there were quarterly updates after that which I recall reading. My interest at the time (several years ago now) was trying to determine how many LR3's were sold in the USA and worldwide. The other info was ancillary to my search, so its more fuzzy in my memory. Sorry.

Edit, I should add that sales figures for the past 18 months or so have been horrible locally. Most dealers around here have completely changed focus to "pre-owned" rather than new. Previously, I'd say from 2005 to 2007, sales were extraordinary and LR was very profitable in the US.

Edit #2: I found my old link to where I had done my previous research, but my credentials have expired. Perhaps you have access?
http://media.ford.com/login.cfm?path_info=/section_display.cfm?section_id=12

Edit #3: I did find a few related articles. This one says the 3rdQ of 2007 was "Best-ever quarter for Land Rover unit sales." followed by a comment that the combined figures for Jaguar and Land Rover posted a small profit. Not insignificant considering that Jaguar is a huge money loser and Ford spent billions developing new product for it during that time frame.

Here is another article from 2006 that I remember reading. It states "Land Rover was the company's only brand to post higher sales in 2006. Land Rover's full year sales totaled 47,774 – a new calendar year sales record"

Based on some other reading, it appears that 2006 was they heyday.

 

[Sleeping Dog]

I think a lot of people who loove their D3s will have second thoughts when they need to replace their clutches or engine drive belts. The LR specified method of clutch replacement takes 15 hours of labour (at over £110 per hour), involving separating and lifting the body away from the chassis, and £900 of parts. Non-franchised garages will take even longer if they lack the special tools.

It is the manifestation of modern crap design, where manufacturers choose to employ new graduates in the design offices instead of experienced engineers, so no thought is given to maintenance simplicity.

Yes and no. What has happened is that the manufactures are now designing vehicles with a primary consideration as to how easily and cheaply it can be assembled. They no longer care about ease of repair/replacement as the the OEM systems are intended to last far beyond the warranty period.

The result is that those who push the vehicle to its limits or seek to optimize it about a use end up with more work and expense than occurred years ago.

Jim