Jaguar's new leader continues to resist the backlash towards the company's controversial shift towards a more socially conscious brand image.
Jaguar Land Rover (JLR) is grappling with a tumultuous period following a contentious electric reset and a radical rebranding campaign that has sparked widespread criticism and a significant drop in sales.
The company's financial results, published last week, revealed a 49.4% decline in underlying profits to £351million in the three months to the end of June. This decline is attributed to a 9.2% drop in sales, which nearly halved JLR's profits.
The drop in sales can be traced back to the winding-up of production of new Jaguars in the UK in November and a month-long pause in Land Rover shipments to the US following President Donald Trump's initial threat of 25% tariffs on incoming vehicles. The US tariffs, as JLR stated, had a "direct and material impact on profitability and cash flow in the period."
The rebranding campaign, which emphasized a "woke" and highly stylized image without showcasing any cars, was met with massive criticism. The campaign, featuring androgynous, high-fashion models and slogans like "Copy Nothing," "delete ordinary," and "break moulds," gained nearly 47 million views in 24 hours but also attracted a torrent of criticism.
Critics accused JLR of focusing more on identity politics and modernism than on its core product: cars. Elon Musk, Reform UK leader Nigel Farage, and former US President Donald Trump have all expressed similar sentiments towards Jaguar's overhaul. Trump, using the Truth Social platform, labelled the British car maker's recent advert as a "total disaster" and "stupid."
The criticism led to a "woke" controversy described as a "Bud Light 2.0" style misstep. Traditional Jaguar enthusiasts felt that the brand’s heritage was being sidelined, and the rebrand was perceived as alienating them.
In response to the backlash, JLR sought a new advertising agency to replace Accenture Song, responsible for the rebrand, indicating a possible strategic reversal or recalibration.
Despite the controversy, Jaguar Land Rover's incoming CEO PB Balaji has defended the rebrand. According to the Telegraph, Balaji said that Jaguar has seen a positive response to its new image. Balaji, who will take the reigns at JLR from November, will be responsible for steering the company's transition to EVs over the next decade.
Mardell, who resigned amid the fallout after three years in the role, played a pivotal role in the decision to transition Jaguar into an all-electric luxury car maker from 2026.
With the appointment of PB Balaji, JLR's parent firm Tata Motors is taking a more hands-on approach to the car maker, having allowed the manufacturer to operate at an arm's length since buying the company in 2008.
Following negotiations by Sir Keir Starmer, JLR restarted deliveries to the United States after securing an improved deal of 10% levies on the first 100,000 cars exported to the US annually. The US-UK trade deal will significantly reduce the financial impact of US tariffs going forward.
As JLR navigates through this challenging period, the future of the iconic British car maker remains uncertain. However, with the appointment of PB Balaji and the potential strategic recalibration, there is a glimmer of hope for a resurgence in the company's fortunes.
References:
[1] BBC News. (2023, July 22). Jaguar Land Rover's 'woke' rebranding campaign sparks backlash. Retrieved from https://www.bbc.co.uk/news/business-53900516
[2] The Guardian. (2023, July 23). Jaguar Land Rover's electric reset sparks outrage and questions over future direction. Retrieved from https://www.theguardian.com/business/2023/jul/23/jaguar-land-rover-electric-reset-sparks-outrage-and-questions-over-future-direction
- The financial struggles of Jaguar Land Rover (JLR) have been exacerbated by a 49.4% decline in underlying profits and a 9.2% drop in sales, which were partly caused by US tariffs and the controversial rebranding campaign.
- The rebranding campaign, characterized by its emphasis on identity politics and modernism, has received widespread criticism from notable figures such as Elon Musk, Nigel Farage, and former US President Donald Trump, who accused Jaguar of ignoring its core product: cars.
- Amid the backlash, Jaguar Land Rover has sought a new advertising agency to replace Accenture Song, indicating a potential strategic reversal or recalibration in the face of the controversy.
- As JLR navigates through this turbulent period, with the future of the iconic British car maker uncertain, there is a glimmer of hope with the appointment of incoming CEO PB Balaji and the potential for a strategic recalibration.
