The COVID-induced Land Rover sales slump has been dramatic but JLR Australia boss Mark Cameron says numbers will be up again as vehicle production starts to ramp up in Europe.
Times have been tough for most vehicle manufacturers throughout COVID-19 and the Land Rover sales slump in 2020 has been quite dramatic. At the end of July 2020, the British marque’s sales were down a staggering 28.9 per cent on the same period last year but Jaguar Land Rover (JLR) Australia Managing Director Mark Cameron is optimistic about the future.
Cameron addressed automotive media today, including Unsealed 4X4, and he explained the many challenges the Land Rover brand has faced so far in 2020, and highlighted some areas for optimism, as well as hinted at some future plans.
“Given the extraordinary times we’re in at the moment, reported sales doesn’t really tell the whole story,” Mark Cameron says. “ I suspect that we might be more affected than some other brands right now, given that all of the production that we sell in Australia comes from Europe, mostly UK build, and the extent of our factory closures which started in the third week of March have been quite elongated.”
Those factory closures include Solihull and Castle Bromwich in the UK, and Land Rover’s new plant in Nitra, Czechoslovakia, where the new Defender is manufactured. And while two of those plants reopened several weeks ago, Cameron said that Castle Bromwich only came back on stream last week, and that all plants were still running at reduced capacity. This has obviously caused some pretty serious supply issues for Land Rover, and Cameron says this is the cause of much of Land Rover Australia’s sales decline in 2020.
“We’ve had light production builds just before COVID hit, and then we’ve had extended shutdowns, so what that has meant is that whilst June was a much bigger (sales) month than we expected… we realised at that point, and our dealers did, that the forward production cover pretty much meant that we were going to run out of cars in some areas.”
Cameron says these supply issues have a flow-on effect with dealers protecting their stock and trading “in a certain way”, essentially so they don’t run out of stock altogether. And he says this is a very real problem and that, compared to August last year, Land Rover now has 67 per cent less stock than it did.
“If you look at our two Land Rover top-selling cars, the Range Rover Evoque and the Range Rover Sport, (stock of) those cars are 85 per cent down and 82 per cent down respectively. In fact, we’ve only got today 60-odd cars – Range Rover Evoque – in dealer stock. So, if you work out what we need in our showrooms across 40-odd dealers, then we’ve pretty much only got what we’ve got on display.”
While the factories have reopened, Cameron says that production is still nowhere near full capacity. “We are still working under heavy constraints,” he says. “The top priority for our business is safety, so the regulations we have to work to in terms of social distancing, even in factories, means that… we can’t run at full line speed. Our world markets have sold down the inventory they had… and we’re all in a queue now to get new stock, and the factories can’t produce that at the rate that we need it, and that’s what’s causing the issue right now.”
Cameron adds that the problem of getting stock is exacerbated here in Australia due to the six-week shipping time the company has to add on to orders. But on the bright side, he also says that despite the large drop in reported sales compared to last year, there is still plenty of demand for Land Rover product. “If we look at our order take, which is what gives me encouragement over the last couple of months – June and July – our order take is actually 30 per cent up on the prior year.”
Once production starts to feed into the country, JLR Australia is very optimistic about the sales potential of its all-new Defender, which is in dealers in limited numbers now. In fact, all diesel models have already sold out, leaving just the P400 petrol six in stock right now. And while Cameron points out that 2020 was not the year the company had expected, with COVID as a backdrop to the Defender launch, he says in some ways it’s not all bad, with many of Land Rover’s customers forced to travel domestically rather than abroad. “They can’t go anywhere, they can’t even travel interstate at the moment, so actually having a car like Defender to launch for those domestic holidays and road trips and adventures is really good timing for us.”
Cameron says that demand for the new Defender has been well ahead of the company’s expectations and that if it weren’t for the aforementioned supply issues, sales would strong. “We’re limited at the moment in our launch stock by powertrain restrictions but, as soon as we get the full line-up available, I think much of that interest will be converted into sales.”
Cameron is looking forward to changing fortunes for JLR Australia in 2021. “At a time when our stock is really low we’ll be bringing in an avalanche of 21 model year (vehicles), quite a lot of facelifts, some big powertrain changes and technology changes, as well as some realignment on specifications, so we’re really excited for when those products start to hit in the next month or two.
“We’ve really been focussed on what our customers have been saying, so when we look at the features and the line-up, it’s very much customer-led, and we’re really making our vehicles as desirable as we can, particularly from an aesthetic perspective, so the right styling, the right wheels, all those sorts of things, to make sure we absolutely nail it in the showroom.”
The new Defender will play a big part in Land over’s turnaround plans, and Unsealed 4X4 will be driving it on Aussie soil for the first time next week, both on the road and off it, so keep an eye out for a full report.