Automotive News Canada - August 2019 - v2 - 11

* AUGUST 2019

WOLFGANG HOFFMANN

JLR's plan
to grow

Long in the tooth and sliding in popularity, the
Grand Caravan is nonetheless still a strong seller.
FCA is therefore in the position of having to invest
in a replacement vehicle in a declining segment.
P H O TO : F C A

FCA's two-minivan
strategy: Is it death
by crossover?
WHEN THE LATE LEE IACOCCA SPEARHEADED
the introduction of the Plymouth Voyager and Dodge
Caravan, Chrysler Corp. essentially created the modern-day minivan segment and established itself as the
leader.
Fast-forward more than 30 years, and Fiat Chrysler
Automobiles still has two vehicles in the segment. And
there are no signs of changing that strategy anytime soon
with the announcement of the Chrysler Voyager.
But it's a challenging time for any automaker to be in
the segment. Sales are down almost across the board.
The Chrysler Pacifica
and Dodge Grand
Caravan, fell 49 per
FROM TORONTO
cent and 23 per cent,
JOHN IRWIN
respectively, in the first
half of 2019. The
Toyota Sienna minivan
was down 1.3 per cent
during that same time,
COMMENT
while the Honda
Odyssey dropped 18
per cent. Only the Kia Sedona registered a year-over-year
sales gain in the first half.
Why are sales down? Much like the collapse of the
car market, crossovers are at least partly responsible.
When Iacocca bet on the minivan in the 1980s, he
foresaw a demand in the market from families for vehicles that were spacious and would be easy to load. When
it came to utility, few alternatives to the minivan existed.
Today, crossovers dominate the new-vehicle market.
North American consumers are drawn to them for that
same reason: Utility. Today's typical crossover gives a
family enough room to drive around comfortably without
sacrificing much in the way of gas mileage or, in many
cases, style. Granted, minivans generally offer a lot more
room. FCA claims the Pacifica holds up 56 sheets of 4x8
building material. Unneeded utility could be a curse, but
another reason that minivans might be struggling: They
just aren't sexy.
To be sure, they aren't really meant to be. They're
meant to make it easier for families to get to where they
need to go. But when a family can get most of that utility
in a vehicle that looks better than a minivan, often at a
price that's equal to or cheaper than one, why would they
not choose the crossover?
It's a problem that FCA has tried
to tackle with the Pacifica, marketed
The minivan
as a minivan that's a cut above the
in terms of style and features.
curse is that they rest
But it has yet to translate into overhave more utility whelming sales success, with the
than most people bulk of the automaker's minivan
sales in Canada coming from the
really need, and
outdated and soon-to-be-phased-out
crossovers are
Dodge Grand Caravan.
Despite plunging demand, a sizbetter looking.
able market for minivans still exists.
The Grand Caravan and Sienna rank
among their respective automakers' top-selling vehicles,
even as sales decline. And FCA obviously still sees a
future in the segment if it sees the need to release the
Voyager as an eventual entry-level replacement for the
Grand Caravan.
But it's clear that the segment's popularity among
Canadian families is waning, and it will be interesting to
see how automakers respond, and if those responses are
effective at all against the rising tide of crossovers.

- ANC

Adding dealerships is important, but
JLR Canada needs to improve customer
satisfaction by using new technology,
said company President Wolfgang
Hoffmann. P H O TO : P E R RY L E F K O

More retail stores are
being built in Canada,
sedans are still a big
part of the picture,
and the Land Rover
Defender is coming
By PERRY LEFKO

TORONTO CORRESPONDENT

TORONTO - JAGUAR LAND
Rover Canada will forge ahead
to increase the number of dealerships despite a softening market and a buyer shift away from
sedans, company President
Wolfgang Hoffmann said.
"At the moment, we have
25 dealerships," Hoffmann told
Automotive News Canada. "And
by the end of 2022, we will have
32 in total. That was the plan
announced in September 2017,
and nothing has changed."
The first of the new stores
will open in late summer in
Ottawa, Hoffmann said, with others planned for Alberta, British
Columbia, Ontario and Quebec.
"It's probably a three-year
process, and some will take longer because of the municipalities
and their way of handling these
applications."
JLR has not been immune to
consumers' growing preference
for utilities over sedans. During
the first seven months of 2019,
Jaguar sales fell 15 per cent and
Land Rover sales dropped 3.5 per
cent, according to the Automotive
News Data Center in Detroit.

JLR Canada President
Wolfgang Hoffmann stresses
that electrification of
vehicles - Jaguar I-Pace
pictured - needs to proceed
independently of government
incentives. P H O TO : J L R

"The total market softens and
then specifically the premium
market softens for various reasons. It's maybe not as easy to
get credit anymore, or the housing market slowed down, or people don't feel as wealthy anymore ... that puts pressure on the
total premium side."
Still, Hoffmann has confidence in the long-term future of
passenger cars.
"It is still a very significant
part of the market, especially
in other parts of the world," he
said. "North America is a different situation. We as a company believe there is still a place
for the sedans. I also personally
believe if you see a shift and a
trend in one direction, you will
at one point see a leveling off,
and some people may be coming
back to the sedans."
Hoffmann, a 53-year-old
native of Germany who moved
to JLR from Audi Canada more
than three years ago, commented
on a range of issues:

ON WHETHER HE HAS REACHED
HIS INITIAL GOALS WITH JLR

I think we have achieved
most of our objectives, but there
is still so much work to be done
- on the customer satisfaction side,
integrating
new tools in
the showroom, building out new
technologies
to the showroom. There's
so much more than just the brick
and mortar.

ON JLR'S NEW ARCH IMAGE
PROGRAM, LAUNCHED LAST
NOVEMBER

When you are in front of our
showrooms, you see two arches
on either side of the building
- one for Jaguar, one for Land
Rover. We have 15 of the 25 dealerships that have been converted
or built new. This year we expect
another six to come online. The
cost depends on each individual retailer. We worked very diligently and intensively with our
colleagues in the U.K. to get the

cost per square footage ... down
as much as possible.

ON LAND ROVER'S 11.5-PER-CENT
INCREASE IN SALES IN 2018

Our numbers are very positive. We are gaining market
share with Land Rover; that's
the most important thing for me.
You can argue, of course, the
trend to SUVs helped Land Rover
a little bit more than the Jaguar,
but we are happy with both performances.

ON REINTRODUCING THE OFF-ROAD
DEFENDER, ABSENT FROM NORTH
AMERICA SINCE THE 1990s

What we heard in Canada was
there was a lot of rumbling about
the Defender a year ago. We were
approached not just from our
dealers but also customers wondering if it was true. I believe
there is a lot of pent-up demand
for a car like that from a premium manufacturer because no
one else offers that.

ON CHANGES AT JLR CANADA'S
HEAD OFFICE IN MISSISSAUGA

We changed the dress code
last year [to include jeans]. We
need to be professionals for our
partners in the U.K. and our
retail partners and show them
the respect. It's a business-casual look ... They don't wear ripped
jeans. And in the summer, we
do some barbecues together and
try to inject a little bit more fun.
We've also given our employees
more access to our vehicles and
let them take the cars overnight
or for the weekend to take pride
in it.

ON PLANS TO ELECTRIFY ALL NEW
PRODUCTS STARTING IN 2020

The whole strategy ... is independent from whoever rules the
government because you can't
base a strategy on who is governing the country. You do it
because you believe in it, and
we need to find a way to move
away from internal-combustion
engines. ... We believe the way is
battery electric.

ON FACING NEW CHALLENGES

This is home, my permanent
job; it's a dream job for me, and
I love what I am doing. There's
so much more to be done moving
forward. - ANC

Automotive News Canada - August 2019 - v2

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