By Rob Morris
Car maker's regional MD says 2008 volumes will not be repeated.
Luxury car maker Jaguar Land Rover admitted on Monday that it expects to sell fewer cars in the Middle East this year, compared to 2008.
Robin Colgan, managing director of Jaguar Land Rover Middle East, told Arabian Business that a repeat of the company’s high sales volumes in 2008 is unlikely this year.
“We are certainly not expecting to see the year-on-year 20-25 percent growth for Land Rover, and in Jaguar’s case 35 percent increase, that we saw in 2008 and 2007,” he said.
“Do I think the market will remain stable and that we’ll achieve our 2008 number again? I doubt that we will to be honest.
“We are certainly looking at a lower number than 2008 and the reason for that is the US has probably had a good nine to 12 months of slowdown for them to work out a [car sales] run rate,” Colgan added. “Europe has had around six months and we have had eight weeks.”
The British car manufacturer’s latest figures show it made 226,395 Land Rovers and 60,485 Jaguars available for sale in 2007. No announcement concerning the number of cars sold has been made.
A slowdown in UAE property demand will hit car companies’ 2009 sales, according to Colgan.
He said: “All car manufacturers should expect to see their sales performance someway linked to the property market in the UAE. As there is a slowdown and correction in the property market, I think it’s reasonable to expect to see a slowdown in car sales.”
But Colgan is bullish about the months ahead, despite the expected drop in sales.
“In the 18 months before the credit crisis Jaguar Land Rover made a profit of 600 million pounds, so we have a really strong business,” he said.
“We are a small volume brand with luxury products for a very specific audience and one of the things that puts us in a strong position here is we are not reliant on huge volumes to keep profits up.
"As car manufacturers go, we are a small manufacturer with a small volume base and we’re not trying to grow massively because we are happy with the size we are at.”
Obviously Mr Colgan is completely unaware of the bailout announced by Lord Mandelson on 27th Jan 2009 - far from being a strong business, Jaguar Land Rover is in a dire situation.....cashflow has dried up and the number of cars sat around in the UK is growing by the week. 450 job losses today at Jaguar reflect a very different picture than portrayed above. I have a cousin, working at Jaguar, who tells of the huge amount of cars on any empty space around the Jaguar plant and test facilities - how will the company sell these luxury cars? One opportunity is to exploit the exchange rate and depreciation of sterling vs $ and AED - Jaguar / Land Rover UAE, amend your pricing and you will sell hundreds of new vehicles in the UAE and broader GCC in 2009 - you have a product that is hugely popular here. This obviously has implications for second hand values, but if there is a real business opportunity should you be brave enough!!
Mr Colgan's comments seem as unreliable as the cars he sells. Quite why so many people buy Range Rovers in the Gulf and the UAE in particular is beyond me. Zero resale value and an appalling reputation for reliability would make growth hard even without the financial crisis.