Can Jaguar really challenge BMW and Mercedes?

At the moment it seems to be doing a remarkably good job considering that, shortly after Indian firm Tata bought Jaguar Land Rover from Ford in 2008, the financial crisis struck and the deal looked a lemon.

Tata Motors has just announced profits equivalent to $2.1bn with JLR contributing a chunky $1.7bn which seems an amazing amount although profits elsewhere in Tata Motors were hit by the launch costs and initial problems of its 100,000 rupees (£1300) Tata Nano car in India.

Jaguar (and indeed Land Rover) is also doubtless benefiting from the huge demand for posh cars in China which may not go on forever as the Chinese economy buts up against supply and overheating problems.

But Tata says it plans to invest $5bn over the next few years in engine development (it currently uses Ford engines) and make more us of its greatest asset, Tata Steel, one of the world’s biggest steel producers.

So the company may finally have the scale to compete with the likes of BMW, Lexus (owned by Toyota), Audi (VW) and Mercedes in the executive-to-luxury end of the market.

One of the issues it faces is whether or not to follow the three German companies in producing smaller cars (Audi has just launched its A1).

In the meantime we wait to see if the company’s rather eccentric approach to marketing, exemplified in the formation of its new in-house Spark 44 agency headed by a group of German car executives pays off.

At first glance this seems to be a challenge the company had no need to answer (agencies including the former incumbent Euro RSCG know plenty about advertising cars).

But car marketers are historically resolute in ploughing their own furrow so we’ll just have to see what the first ads look like.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.