Jaguar and Land Rover Brands Success Story since 2008 - Case Study Example

International Business: Jaguar and Land Rover Brands Success Story Since 2008 Name: Lecturer: Course: Date: Introduction UK has had a varied and rich history of manufacturing. From important elements of trade like steel and coal, furniture, textiles and consumables like pottery, to present-day manufacturing of digital technologies and specialist products. The history of production within the UK is interesting and at all times a contentious matter (Jury, 2012). Car manufacture has been a profitable business in UK over the decades. Within the UK car market, there exist varieties of impressive car manufacturers who produce various brands to fit the customers’ needs, as well as the competitive market. They include Tata Motors (Land Rovers, Jaguar), BMW (Rolls Royce, MINI), Honda, GM (Opel/ Vauxhall), Toyota, Nissan and VW (Bentley) (Denis, 2015). These models have, for the past five years, made automotive the largest UK production export sector through which it has exported over 78 percent of the manufactured vehicles overseas (Denis, 2015). This paper therefore, provides a brief background to the UK car manufacturing industry. It explains why JLR has become internationally successful in the UK since 2008, as well as shows how foreign markets like India and China have added value on the sales of JLR. The paper further discusses the ethical and cultural issues that may emerge in engaging with overseas production, in addition to the issues surrounding the over-reliance on foreign markets for sales. History of Car Manufacturing in UK Car manufacturing in UK has been the most contentious fields in recent years. Over the past 60 years, UK car manufacturing industry has seen diverse variations in the number of vehicles produced strictly in the UK. From 1950 to 1960, for instance, the number of vehicles manufactured moved from 523,000 to 1,353,000 (Jury, 2012). However, from that time, there have been substantial closures of the plant that have affected the fact, as well as the perception of car manufacturing within the UK. Around 1,344,000 cars are still produced each year. Historically important producers have presently moved factories and premises to other nations (Jury, 2012). This comprises of higher-end brands, such as Jaguar and Aston Martin. Similarly, the production of other vehicles, such as Reliant Robin and Peugeot has also extended to other countries. The movement of the industries is part of a broader movement from local to international industry (Jury, 2012). JLR Success The JLR Company is among UK’s car manufacturing company established in 1922. It was founded by two motorcycle fans, namely William Walmsley as Jaguar and William Lyons (Denis, 2015). After Jaguar and Land Rover were acquired in 2008 from Ford by Tata Motors, India’s biggest automobile manufacturer, the two brands were merged into a single company in 2013. Through an agreement, Ford’s responsibility was to feed Jaguar with the required technology, information, power trains as well as future products (Denis, 2015). Hence, since then, they have become internationally successful in the UK due to innovative technologies and memorable vehicles that have contributed to a long-lived legacy. JLR possesses very successful brands within the global market that have their strengths. First, the company’s major strength is their top marque of luxurious vehicles (Denis, 2015). Since 2008, most of the JLR cars won the prestigious awards. This has made their products to be acceptable globally, thus making Jaguar possess an instantaneous recognizable icon. A number of these awards entail Gear Magazine awards, which was won twice (best executive vehicle of the year and best interior car of the year in 2009). Additionally, it won the Magazine fleet world honors in 2009. These awards appeared just when the company had brought in unique selling point in Jaguar Sequential Shift TM, Jaguar drive Control TM and Jaguar drive selector TM (Denis, 2015). JLR promotion plan is another strategy that has led to the company’s international success. The company has established the promotion through TV music where the best singer is awarded a car (Denis, 2015). This is among the best ways of building the company’s image. Use of dealerships is also another common advertising plan. In this plan, customers are put under pressure and persuaded to purchase the vehicle. Mostly, this is done through good deals and impressive showrooms. Other promotion strategies include the use of the internet, as well as press advertisement in fashion, men’s style and car magazines (Denis, 2015). The TATA ownership is another element that has positively contributed to the international success of the company (Denis, 2015). Though TATA previously had negative responses concerning the JLR sale in 2008, it has shown so far an honest commitment in making the current company brands better, as well as formulate more brands that would fit within the market and make the sales better. This is since TATA Motors is an old and the largest firm that produces cars in India. JLR Sales in China and India TATA is set to benefit from the continued increase in Indian automotive sales, as well as from the enlargement of luxury markets within the growing economies, such as China. Over 80 percent of JLR, sales are from the foreign markets (Jain, 2014). By 2012, China overtook UK, and became JLR largest market. It is the quickest developing automotive market in the world. This is because of the need for premium cars in China (Team, 2014). Sales in China increased by 71 percent in 2012, that is, 72,000 cars, though by 2013 it sharply increased to 90,000 cars (Riley, 2014). This shows that besides a progressively growing market size, gaining of both the value and volume share of British brands in the country made them succeed. To set up a foothold within the Chinese market, JLR had to establish NSC (National Sales Company) in July 2010 to manage, set up and develop its dealer network (Riley, 2014). This has tremendously added value to the sales of JLR. Additionally, in order to succeed in China’s aggressive luxury car market, JLR had to produce their cars in China. To achieve this, JLR needed a joint venture, which was a prerequisite for the automobile sector in China. This is a necessary requirement for any industry interested in developing Chinese brands. In November 2012, JLR publicly declared that it would for the first time make cars in China after a £1bn joint venture with Chery was approved by the Chinese Government (Riley, 2014). This joint venture would help with the development of cars specifically for the Chinese market. Another major advantage of the joint venture is that JLR will gain access to a well-established and much wider dealer network throughout China. Thus, it will maximize sales opportunities within the major urban regions by evading China’s 25 percent import taxes. Local production will also reduce model prices thus adding value to JLR sales (Team, 2014). Conclusion JLR faces a very difficult market, as there exists a broad competition from majority of the car manufacturers. This is since the market is big and luxury cars, such as the Cadillac and Escalade, are highly regarded. Having promotion strategies, localizing production, changing ownership and manufacturing memorable cars is therefore, a fundamental element of building up the novel image of the company that needs to distinguish itself from the crowd to raise its profits. Thanks to having great promotion strategies as well as great leadership by TATA, JLR will be known as a firm that creates not only high-quality cars, but also backs up noble initiatives. Since local production will create a more faithful customer base and strong consumer trust, purchasing JLR’s new car will seem to be the best option for the potential consumer. 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