How The Americans Saved Jaguar

Anyone connected with a ‘Brand’ knows that retaining customers and growing sales from that base is much more cost-effective than trying to get conquest sales, but customer retention methods vary.

Most methods could be described as a bribe really, either in the form of a cash bonus, a discount or buy one, get one free.

In the early 90s Jaguar Cars in the USA faced a serious problem. Its customer retention rate fell as low as 27%, reflecting its reputation for poor quality cars. Jaguar dealers really only sold cars two ways - cash, or hire purchase, and once customers came to grips with the reality of poor quality they were usually lost to the brand.

Jaguar’s owner, Ford Motor Company, appointed Jim Padilla, one of its top engineers and quality control experts as Chief Engineer. He worked a form of magic to ‘design-in’ better components, and reverse the line workers attitude to quality. His efforts effected massive quality improvements in just two years.

Despite vastly improved cars, Jaguar’s reputation remained tarnished, and although the public relations programs were aimed at getting the word out, it was clearly going to take a long time before the ‘new and improved’ image penetrated the phobia most potential buyers suffered from.

Jaguar got great press, and the media acknowledged the cars were clearly much improved. Even Jaguar dealers, who were as critical as the customers were impressed. But, Jaguar needed something extra to bring in the buyers, and more importantly, retain them as loyal owners.

Ford operated a very successful leasing program, called ‘Red Carpet Leasing’ and Jaguar decided that leasing could not only increase sales, but may also lead to stronger customer retention.

Just two years into the leasing program the signs were good. Jaguar’s rating in the influential J.D. Power Initial Quality Study (IQS) shot up near the top, and dealers told the company that the customers regularly reported their satisfaction with the quality of the cars.

Sales rates also climbed as a result of the new leasing program, and thanks to an innovative way of dealing with cars at the end of the lease contract, it looked like all the factors which improve the residual (or retained) value of off-lease cars were pointed in the right direction.

Jaguar had taken the decision that as cars were returned at the end of the lease contract, rather than let them be sold on the open used car market (where there would be no control over prices), it would take in all the cars, and after a very exhaustive mechanical check, would auction them only to Jaguar dealers, via one of America’s most respected auction companies.

This way the best ‘used’ Jaguars were only available through its dealer network. This had two benefits - first, it helped maintain good prices (retained value), but more importantly the second benefit was that it made ‘cheaper’ Jaguars available to a new class of buyer - people who always lusted after a Jaguar, but couldn’t afford a new model.

All America's Jaguar dealers sang with one voice: "It was the leasing program which helped Jaguar turn the corner in its biggest and most important market". 

Keeping in mind that most lease contracts were for 36 months, after just six years Jaguar’s customer retention rate had soared to more than 65%.

So, Jaguar’s method of building a stronger customer base wasn’t a bribe, because it was quite a complex and expensive gamble involving a new way of getting people to consider a sort of ‘try before you buy’ scheme, and let them experience Jaguar’s improved quality. It was also much easier for the dealers to replace an off-lease car at the end of the lease contract with a new model - and that’s when the customer retention rate ratcheted up and confirmed the success of the program.

Concurrent with the lease program Jaguar took an even riskier retailing gamble, by offering a 30 day money back guarantee to any buyers who paid cash, or took the car on hire purchase! Auto industry experts in America thought it was crazy! Given Jaguar’s poor reputation for quality, this was sure to lead to hundreds of cars being returned!

In reality, for the duration of the year-long program, Jaguar only repurchased less than two dozen cars. Some of course, were frivolous returns, from buyers testing the scheme, but there we some genuine cases. However, that program, helped convince potential customers that Jaguar must have truly gotten on top of the quality issues.

All of which goes to prove that if you want to get really serious about retaining customers it’s going to cost time, money and genuine effort, to bring about change. Remember, you get nothing for nothing!

Oh, lastly. Sales? From a nadir of 9,651 in 1991, along to 1996 when Jaguar was selling close to 22,000 cars a year to Americans.

BMW's Numbers Game - 60 from 1

Over my years of car testing I’ve driven lots of BMWs and always enjoyed them. Back in the 70s, in Munich, I got a lecture from the then PR Chief about how BMWs were drivers’ cars and that the design and engineering principles were inviolate.

 

As far as I’m concerned BMW has religiously stuck to its brief, but at this year’s Geneva Salon BMW will break a covenant – front wheel drive models from the company that prides itself on producing only rear wheel drive cars!

 

While the new 1-Series (below) features a twin-turbocharged diesel engine that delivers 60 mpg (4.4 l/100km), I believe we will see the first production FWD cars, which evolved from the Active Tourer Concept design model shown at the Paris Salon last year.

 

BMW enthusiasts should not be the slightest bit concerned about this shift – if this company can produce a great car like the Mini, then a FWD BMW should be a doddle.

 

Looking back to BMWs I’ve driven recently, it is the diesels I have most admired.

Sure, I truly enjoyed a petrol-powered M3 coupe, which was launched to the media in Port Macquarie, and a fantastic drive up through the Great Dividing Range, along the Oxley Highway to Walcha – then back down the mountain to a fabulous dinner, replete with great driving stories recalled from the day’s drive.

 

However, I think the BMW X3 2.0D, the 520D and the 730D are the cars that I’ve really enjoyed – not only for their driving pleasure, but the delivery of a great experience from a diesel powerplant.

 

I drove the X3 SUV around the Mount Macedon region, just outside Melbourne – and I came away thinking: “Why would you want a bigger, more powerful SUV?” This practical off-roader has loads of room, compact dimensions, and terrific performance.

 

Then I drove the 520D along what is called the ‘Burke & Wills Track’ and marvelled at how a 2-litre diesel had been fitted to a (relatively) big car, and how the performance hardly seemed to suffer – certainly not by my subjective judgement! It’s a great highway cruiser.

 

A spin on the Queensland Gold Coast’s mountainous Hinterland roads in a 730d showed that even the biggest of BMW’s models had been enhanced by a torquey, quiet, and fuel-efficient oil-burner.

If the Active Tourer Concept (below) comes to market looking like it did in Paris, I think BMW will have another winner on its hands. Front-Wheel-Drive? No worries.

 

 

BMW has stuck to its principles and despite the fact that (in size) it’s a minnow, compared to Daimler-Benz and Volkswagen Group, I think that as long as we are able to enjoy driving great cars, we will love the fact that BMW continues to adhere to the principle of the ‘Ultimate Driving Machine’.

Matthew's the Man!

Is there no limit to the talent streaming through the Brabham family? Recently, I had lunch with Matthew Brabham, son of Geoff and grandson of the great Sir Jack Brabham. This wasn’t any old lunch meeting, our group was recognizing Matthew for an outstanding racing season in 2012, in which he performed very well in the UK in Formula Renault, but the icing on the cake was winning the U.S. Formula 2000 championship.

Matthew finished 8th in the final race, to clinch the title, and as the 'Cooper Tires USF2000 Championship powered by Mazda'  is part of the ladder system leading to Indycars, he won USD$375,000 towards his 2013 season.

Only 18 years of age, but displaying maturity beyond his years, Matthew was delightful to talk to. He’s level-headed, a no BS sort of guy and appears to possess the trademark Brabham determination.

He was sitting alongside his famous grandfather at lunch, and whilst talking with Jack I could tell that he’s immensely proud of Matthew’s results.

“He’s a good kid, with a ton of talent, but a great personality.” said Jack.

Grandad is right. Matthew is straight-up, and whilst he does nothing to ignore his family lineage, he certainly doesn’t appear to trade on it in the hotly-competitive racing world in which he operates. He’s enormously pragmatic about his potential, his talent and his future.

Matthew said: “I don’t have any fancy ideas about being at the front of the pack, because I’m from the Brabham family. You only get to the front if you’re good enough, and determined enough.” I can see from this brief meeting, he’s all of that and more.

Expect to see this bright, young Brabham on the top step on more and more podiums in the immediate future.

Surfers Paradise 1966

It was good to catch up with Jack, whom I first met in 1966 at the very first race meeting held at Keith William’s Surfers Paradise racetrack.


He was friendly, and open and our interview was not just a thrill, but a pleasure. After we finished, one of his mates from Repco said: "The reason he opened up, was because he recognized you knew your stuff." Nothing's changed with Jack.

Although today his hearing problems make lengthy conversation difficult, I’ve learned over the years that concise, intelligent questions always get a straight answer.

I’m amazed at how well he looks, given that he’s on dialysis three days week, but I’m so proud to be able to say we’re friends. We reminisced about a meeting we had in Sydney in  1997 when the editor of the Honda Australia Owners’ magazine commissioned me to write the story of Brabham’s tilt at Formula Two in 1967.

Sydney 1997 - photo courtesy of Lady Margaret Brabham

I have to thank my good friend, Grahame Ward, for inviting me along to the lunch to meet Jack and Matthew. And, I’d also like to thank my old mate Max Stahl for taking the memorable photos of me with the two Brabhams. Thanks guys.

Been a Bit Quiet Round Here, Right?

That’s because Driving&Life has been on vacation (again?), and indulging in the pleasures of a cruise around the South American continent - starting from Valparaiso in Chile, passing Glacier Alley, around Cape Horn and finishing in Rio de Janeiro.

Cruising along Glacier Alley

What‘s always fascinating of course are the cars you see and the way the markets segment. What was really interesting (after visiting many cities in Chile, Argentina, Uruguay and Brazil) was the almost total lack of visibility on the road of any form of luxury car!

I did find one to photograph, a matte finish Mercedes coupe! Shortly after I took the photograph, the owner rushed out from his Ipanema apartment, and moved it down to his locked, security garage under the building!

Of course most big South American cities have extensive, popular, cheap and accessible public transport. Buses are well subscribed and there’s lots of them, and they’re air-conditioned. Taxis are plentiful and cheap, but the drivers are basically rogues-in-disguise.

So the basic recipe for a private car in South America is a small-medium five door hatch, probably made by Volkswagen or Fiat, with lots of Renaults in Argentina. Of course Ford and GM are well-represented with oval or bowtie-badged models which emanated from somewhere in the Ford/GM global model program.

Volkswagen Gol

Volkswagen is a very interesting study. For many years, after it set up one of its most successful global operations, Volkswagen do Brasil, it built cars solely for South American consumption based on unique platforms, and sometimes even with engines shared with Joint-Venture partners like Ford.

Volkswagen Fox

Model names like Fox and Gol were cars unique to South America, and only recently have those variants been brought into the global family of platforms. However after all this talk about models based on various platforms you must not forget that there’s still a lot of old cars on the road in this huge continent. A couple of examples stood out.

In Montevideo, Uruguay there was an effort to maintain a very old Opel. 

In Buenos Aires I spotted a very well-worn Renault 12.

A very common sight among the taxi fleets is Renault's low cost production car, the Logan, It's very popular, but when you get up close, it's a pretty small car.

Renault Logan

Traffic Light Grands Prix is still a popular sport, but then these  are Latin countries with supercharged testosterone added to the fuel mix.

Traffic jams are just as common in Buenos Aires and Rio de Janeiro as they are anywhere else, but on the day we arrived in Rio a spectacular accident at 3pm had completely blocked the three lanes from downtown Rio to the beach suburbs at Copacabana and Ipanema. A 13 km stretch, with no chance to divert!

Of course in Rio, in highly Catholicised Brazil, the statue of Christ the Redeemer watches over everyone from Corcovado, so I was hoping a little religious surveillance might have helped resolve the traffic issues. Not so, it still took two hours to travel from the main port to Ipanema.

I guess one of the biggest highlights for me was a real surprise, in Buenos Aires. At the end of a city tour the tour bus drove quickly past a bronze statue in a city park, before dropping us near an excellent Argentinian BBQ restaurant. After lunch I walked back to the park to find it was a fantastic bronze of Juan Manuel Fangio and a Mercedes W196, just opposite BA’s main Mercedes-Benz dealer.

My wife asked me; “If Buenos Aires can do this for JMF, why can’t London do the same for Sir Stirling Moss?” I decided to write to Boris Johnson on my return home and suggest that very idea.

The real reason I was keen to visit South America, was the final stop in Rio de Janeiro. For me, its special value is the Home of Bossa Nova music, my all time favourite jazz genre. I grew up on a diet of Tom Jobim's seductive rhythmns which of course began with The Girl From Ipanema.

Garota de Ipanema

As it turned out we dined in the restaurant named for the song, Garota de Ipanema, presumably where composers (Antonio Carlos Jobim and Vinicius de Moraes) watched the inspiration for the song, passing by each day.

Vinicius Piano Bar, Ipanema

After dinner we walked to the opposite corner to the Vinicius Piano Bar, a well-known hangout for fans of Bossa Nova.

Toni Barreto

We were lucky to catch local star Toni Barreto perform a string of Bossa Nova standards as well as some his own songs. What a great way to end the night!

Helo Pinheiro circa 1961

The girl of Ipanema is a real person, and today, still a stunner. Her name is Helo Pinheiro, and the much-publicised shot of her emerging from the surf was taken around 1961.

Today, she's a  beautiful, cultured ambassador for Ipanema, and her daughter, Ticiane, is working as a model. She's found the right niche! Right!

Helo & Ticiane Pinheiro

The beach at Ipanema was everything I expected it to be. The sand is soft, white powder (just like Queensland's Gold Coast beaches); it's long, broad and washed by seabreezes - however the locals tell me it's only warm enough to swim between February and April, due to the cold current which sweeps down the Brazilian coast from the middle of the Atlantic!

Ipanema Beach late Friday afternoon

Ipanema Beach on Sayurday morning

South America was interesting, fascinating and humbling because of its size, populations and cultural conflicts. Let’s not forget that the expeditions to this continent by the Spanish and Portuguese were some of the most violent and punitive colonial conquests in human history.

In addition the area was the beginning of the slave trade from Africa, so this mix of Africans, local native tribes and Europeans has truly compounded the cultural chaos that exists today. However, at a casual glance the South Americans seem to handle this diversity much better than the North Americans - where racial unrest still exists today, not far below the surface!

In a broad sense, when we look back at the era of discovery and conquest (1492-1572), there’s not a lot to be proud of, especially in how native peoples were treated. However, this is what we’ve ended up with and the people of these South American countries are making the best of their lot.

They’re great food producers and manufacturing centres, and of course they are now among the biggest producers of raw materials for the giant Chinese economy. In a sense, coping with that success, and how it translates to its people is the biggest challenge ahead.

Despite many years of poltical stability in Chile, Uruguay and Brazil, there is still trouble bubbling just under the surface in Argentinia - and that could blow, any time!

On an optimistic note, what you need to find in any city you visit is a positive, optimistic, happy and friendly guy like our cab driver in Rio, Heinrich. On our way to the hotel from the Port, he humbly suggested he could take us on a full guided tour of Rio and environs next day for a very modest sum.

Sugar Loaf, Tijuca Rainforest and Favelas (shanties)

What a day! We took in Corcovado, Sugar Loaf, Tijuca rainforest, Jardim Botanico and some real hidden spots in the city. It was worth every Brazilian Real we paid. Not only did we see stuff, with a local, but also a friendly and charming man who was very proud of his city.

Obrigado, Heinirich!

Alfa Mail

The news just in! Alfa Romeo will develop a dynamic new Spyder sports car, using the Mazda MX-5 as the foundation. What ?!?!

The MX-5 is undisputed leader of the sports car ranks, in dynamic and image terms and it's going to be the basis of a new Alfa Romeo! Great! If you can’t beat ’em, join ‘em.

Mazda MX-5

I think this is a very sound decision and makes perfect sense. The plan was canvassed in an excellent story in Fairfax Media’s DRIVE section, written by my good friend, Peter McKay.(See Link below)

http://smh.drive.com.au/motor-news/ragtop-renaissance-20121109-291l0.html

The Alfa Romeo division of the giant FIAT car company has always been something of a poor relative in recent times. It has had just enough investment to maintain an exciting model range, and produced some great cars of late - the 147, 159 and Brera.

Alfa Romeo 147

Alfa Romeo 159

Alfa Romeo Brera

However, from the standpoint of commercial success, it has struggled to be profitable, because it’s a niche brand, with a relatively small fan base.

FIAT recognizes that Alfa Romeo is a powerful, emotional marque, with a distinguished history and image, and certainly doesn’t want to discard it. But, how do you justify continued investment on a brand which doesn’t sell enough cars, and yet demands integrity of design and engineering?

As happened with the current 159, you ‘borrow’ a complete platform from either another car in your portfolio (EG: Golf/Audi A3/Skoda Octavia), or in the 159’s case, another car manufacturer.

Alfa Romeo 159

The 159 is built on a platform which GM Europe originally planned for Vauxhall and Saab, but neither company opted to use it, and in the middle of the brief GM-FIAT marriage, FIAT simply ‘told’ Alfa Romeo division that this would be the platform for the successor to the 156!

Alfa Romeo Spyder 2011

The Spyder version of the Brera is a good looking car, but this Giugiaro-designed model will soon disappear, and thus we now hear about the plan to build a new Spyder on the Mazda MX-5 platform.

Mazda MX-5

I can’t wait to see it - that is, providing Alfa Romeo gets someone other than the design team at Centro Stile to create the shape.

The 159, Brera and Spider were all done by Ital Design, but now that company is owned by Volkswagen AG, it seems unlikely it will be asked for new design ideas.

The danger is that Centro Stile’s efforts on the horrible MiTo and Guilietta (two forlorn, and sad-looking cars; with their ‘bug’ eyes staring down the road) may be visited on the new Spyder. Aach!

Alfa Romeo MiTo

Alfa Romeo Guilietta

Alfa Romeo could do worse than embrace the concept car developed by Pininfarina for the 2010 Geneva Salon.

Called, the 2uettottanta, the car looks every bit like all of us Alfisti would imagine a new Spyder. I guess the strange alpha-numeric name is supposed to embrace the word Duetto, meaning twin - for the two only seats.

Whatever happens, looks like FIAT's Sergio Marchione, may be clever enough to keep Alfa Romeo alive and well. Even if it does mean 'borrowing' a platform. Smart thinking Sergio - keep costs down, keep the name alive!

Mazda MX-5 photos by Thomas Salt. Tom Salt is a freelance photographer born in New York, educated in England but now living near Lübeck in Germany.