Driving and Dining with Land Rover
In the twenty-one years that Popham has been with Land Rover, he has seen the business go from being part of the BMW premium group to being fully owned by Ford Motor Company. When Ford Motor Company owned Land Rover they were part of the Premium Automotive Group (PAG) they included Lincoln, Volvo, Aston Martin, and Jaguar.
Who is TATA?
Fifteen months ago TATA motors of India bought both jaguar and Land Rover from Ford Motor Company. TATA is best known in the United States for producing the cheapest car in India, the NANO, starting at $2,500 USD. But TATA is very diversified, with a portfolio that includes Tetley Tea, TATA steel and an insurance company.
Popham talked to me over dinner in Manchester, Vermont about TATA and Land Rover. Popham said Mr. Tata was a petrol head at heart and an architect by degree. Tata’s ethic and ethos were such that they didn’t sell companies that they purchased. What Popham talked about was the direction that Land Rover would be taking under Tata’s ownership.
Ten years ago Jeep was the number one competitor for Land Rover. It’s not just Chrysler’s economic woes that have set them apart. It is only in the United States that Popham says that people compare the two because they are 4X4 competitors. On a global level, Land Rover competes with luxury sedans. Land Rover outsells luxury vehicles in Brazil, Russia, and India. TATA sees Jaguar and Land Rover as luxury vehicles. Even if TATA bring the Nano into the United States, which was not verified by Popham, it would not be associated with Jaguar Land Rover or their dealers.
2010 Model year designs
TATA has spent $600 million to redesign the Range Rover, Range Rover Sport, and the LR4. “We did more changes in exterior and interior design to the LR3 then most auto companies do, so we had to give it a new name distinction.” Popham reflected that on the fact that “there will always be a market for the seven-passenger vehicle. That will stay, but we’ve got to find a way to be more sustainable.” A lot of the concern for this niche market company is the new CAFE regulations that have to be met. When I pointed out that if TATA would bring over the Nano it would help Jaguar and Land Rover meet the CAFE regulations Popham said that might help, but was quick to note two details:
* TATA motors would not be associated with the Jaguar Land Rover group.
* CAFE, under the new regulations, was more about the footprint of the vehicle being sold, not the aggregate of the vehicles sold by one company.
What about Land Rover alternative energies diesel, hybrid and electric cars?
Land Rover is already working on some British Government funded projects on advanced technology. There is a stop/start manual on the Freelander. Popham said there was a “possibility of diesel” but he didn’t put much hope into that sentence. Instead, he saw hybrids as the leader for now in the United States. “Customers say they want more miles per gallon and advanced technology, but they are not willing to pay for the true cost.”
Like most auto manufacturers Jaguar/Land Rover hopes that governments will not back one technology, saying there is “not one silver bullet”. They will be bringing out hybrids: next year, according to Popham, so we can expect to see gasoline hybrid mules/prototypes in the United States while Europe should see diesel hybrids sometime next year. There is a big focus on the core product. “We have to provide maximum fuel efficiency. The trend is to a smaller engine, with better performance.”
But is there money behind the words?
It takes big money to create advanced technology that works. “We know we can’t do it alone. We’re going to need partners to collaborate with. We have 120 engineers working on future technology, alone!” Popham wouldn’t say who the manufacturers were, but it didn’t appear that BMW or Toyota was in the running. A simple guess would be Ford Motor Company since Jaguar and Land Rover already get engines from Ford. Ford has knowledge of the gasoline hybrid SUV market. It makes sense to me.
Popham added that the next round of funding that comes from TATA will be 800 million pounds that will be spent on sustainability between Jaguar and Land Rover. One would think that because TATA owns a steel company that Jaguars and Land Rovers would be made out of steel. “We get no dollar preference on steel just because TATA owns it. We have to cut our weight on our vehicles. We can use aluminum; we can use smaller displacement engines. We are even looking at the weight of a bolt.”
Julian Whitehead, director of sustainability and corporate social responsibility
I was so interested in what Jaguar and Land Rover were doing on a sustainability side that Popham had Julian Whitehead call me. I asked Whitehead what the goal for this 800 million pound investment was?
Julian Whitehead pointed out that, “First, The 800 million pounds is Jaguar Land Rover. Secondly, the goal is to have a decrease in tailpipe emissions of 25% from 2007 to 2012.”
“Jaguar is part of a UK government-funded project called Limo-Green. Lotus is also part of that group and they have created a 1.2-liter range extender that we are using in the 2010 Jaguar XJ body. In the United States that would equal about 70-90 miles per gallon, or an EU combined cycle with CO2 emissions under 120 g/km.”
I’m thinking of the Chevy Volt and the Fisker Karma. The next natural progression to the hybrid is the range extender, not the fully electric car. It’s baby steps with the American public. Getting them to understand the hybrid has been difficult, and sales have been slow because of the extra cost.
Like Popham said, “Customers say they want more miles per gallon and advanced technology, but they are not willing to pay for the true cost.” Toyota can take on the hybrid market by itself, but Jaguar Land Rover is a niche market. They can’t afford to eat the true cost of advanced technology.
Whitehead said they would be using a 1,200 cc power unit with their gasoline hybrid range extender. “We won’t use this with diesel fuel. Diesel has a lower torque. This power unit calls for a sweet spot of 4,000 rpm. Gasoline runs at a more suitable speed for the electrical energy generation.”
Whitehead talked about the voluntary sort of cap-n-trade program that Jaguar Land Rover is involved in. “There are cycles in auto manufacturing that take time to change. We can’t change the long lead times it takes for us to change our vehicles completely. We can do things right now that will bear fruit.”
“For instance, one project, in Uganda, is making charcoal-burning stoves. Charcoal is the primary fuel in Uganda. It is awful to cook with, and is typically burned inefficiently as well. With this project, we provide not only local employment but also much more efficient cooking facilities. Because it is more efficient, the amount of fuel used is less. , We have reduced carbon emissions into the atmosphere by 2million tonnes.”
Jaguar Land Rover understands that weight reduction is essential. They have just announced that they will be producing a Range Rover compact called the LRX. It is much smaller, but true to the Range Rover product lineup. It also puts Land Rover in the largest growing segment, the subcompact SUV, in the world.