His arrival was unobtrusive and he kept things close to his chest initially, but Jaguar Land Rover’s new boss Thierry Bollore has had plenty to say of late.
Mr Bollore, who took over from former CEO Ralf Speth last autumn, unveiled his Reimagine strategy for the Coventry car maker just a few weeks ago.
It focuses on electrification and redefining the Jaguar brand.
Mr Bollore has also made some bold decisions.
He ditched the new Jaguar XJ model, despite it being almost ready to go into production and several hundred million pounds being spent on its development.
He has also announced plans to cut another 2,000 staff from non-production roles and said vehicle production will not continue at Castle Bromwich when production of the current line-up of Jaguar models made there comes to an end.
Other things Mr Bollore has said might not have attracted similar headlines but are significant nonetheless.
They include making fewer cars but making the company more profitable and the senior management team relocating from the car maker’s global headquarters at Whitley in Coventry to Gaydon in Warwickshire.
Mr Bollore also highlighted quality and how it is perceived as a major issue for Jaguar Land Rover and suggested it could cost the company 100,000 car sales annually.
Clearly the company must improve quality and people’s perception of it in order to drive profitable sales, so we spoke to Warwickshire automotive expert Dr Charles Tennant to take an in-depth look at the issue.
Mr Tennant is a former chief engineer at Land Rover and also sat on the board of Tata Technologies.
What has Thierry Bollore said about quality and JLR, and is he taking a risk by highlighting it?
Charles Tennant (CT): “Thierry Bollore has declared that the company loses more than 100,000 sales annually due to customer perception of quality issues with its vehicles.
“As a Frenchman he may not be familiar with the phrase ‘doing a Ratner’ to describe an own goal in business, where Gerald Ratner the CEO of the major British jewellery company Ratners Group infamously denigrated his company’s products as poor quality in a 1991 speech at an Institute of Directors conference.
“Overnight £500m was wiped off the value of Ratners as their customers turned away and Gerald Ratner lost his job and reputation.
“Today Ratner’s speech is still famous in the corporate world as an example of the value of branding and image over quality. But whilst Jaguar Land Rover’s admission may be astonishing, it is not a gaffe in the same proportion as Ratner’s and has not been viewed with same notoriety by the motoring media – as for customer views on this we shall have to see.
“This is because it is no secret that Jaguar and Land Rover are often publicly placed at the bottom of reliability tables such as What Car, Which and JD Power.”
Is he right to address the issue head-on?
CT: “With Jaguar Land Rover sales plunging from a high of 614,309 in 2018 to 425,974 in 2020 and a hefty warranty bill of £489m clocked-up in nine months last year, it is easy to see why Mr Bollore has his eye on quality as a missed opportunity.
“He is a man on a mission with a bold masterplan and did not baulk when cancelling vehicle programmes including the electric Jaguar XJ and writing off £1 billion of prior investment.
“His assessment was that these vehicles just would not match the exacting technical standards or visual aesthetics for the stunning drop-dead gorgeous cars he wants to create. They were not of sufficient quality in the broadest sense.
“Furthermore, when describing his three-platform electrification plans he placed quality at the top of his agenda for the type of discerning customers he sees as the only future for Jaguar Land Rover.
“With the quality of mainstream automobiles improving considerably over the past decade, and continuing to do so, it is becoming more difficult for luxury and premium automotive manufacturers to differentiate their products from their less expensive competitors.
“This is more so for Jaguar Land Rover who will now have to deliver double-digit profit margins running at lower volumes of around 500,000 and Mr Bollore sees quality as a competitive differentiator.”
Is quality an issue for other upmarket car makers too?
CT: “Sometimes more luxury means more problems and JD Power has said that luxury brands struggled in their 2020 US Initial Quality Study (IQS) – which gauges the performance of new vehicles in their first 90 days – in part due to problems with complex technology such as infotainment systems.
“JD Power uses the term problems rather than faults and measures problems per 100 vehicles which I have converted to per vehicle.
“The industry average was 1.66 problems and best-in-class was 1.36 where Land Rover was second from bottom with 2.28 problems per vehicle and Jaguar sixth from bottom with 1.9 problems – although Jaguar scored higher than Audi, Volvo and Mercedes-Benz.
“The Jaguar E-Pace small premium SUV came top of its class (but that is built by Magna Steyr in Austria) and only three luxury brands topped the industry average – Genesis, Lexus, and Cadillac.”
Tesla’s ‘traditional’ problems
“Interestingly the American electric car maker Tesla was the worst with 2.5 problems – but in their case it was for the traditional failings of paint defects, fit-and-finish, wind noise and squeaks and rattles – all areas where they are still building their competence.
“As expected, Tesla did perform very well in the electric vehicle system aspects.
“But if we consider longer term reliability in the JD Power dependability study (covering 177 specific problems grouped into eight major vehicle categories) of three-year-old vehicles, then it is Land Rover again at the bottom (2.2 problems) with Jaguar third from bottom (1.86). BMW (1.23) and Audi (1.36) were at or above the average of 1.34 and only Volvo (1.85) were just above Jaguar with Mercedes-Benz (1.52) eight places above.
“Interestingly it is the Korean firm Hyundai’s luxury brand Genesis (0.89) that takes the top spot away from Lexus (1.00) who were in second place.
“But Jaguar once topped the JD Power/What Car UK vehicle ownership satisfaction study in 2012 and came second place in the 2009 USA JD Power vehicle dependability study.
“Land Rover was also top of the JD Power APPEAL study in 2005 when it launched the Discovery 3, which itself notched up second place in its own segment.
“But these were years when the total volumes at Jaguar Land Rover were much lower at below 300,000 and the sales boom to 600,000 coincided with a quality crash.”
How does quality control work in the automotive industry?
CT: “In the automotive industry managers are predominantly measured against rigorous targets for the trilogy of quality, cost and delivery (QCD).
“Whereas quantitative targets for cost and delivery are easier to define and measure, quality is less so, often being more qualitative with an element of subjectivity.
“Whilst methodologies such as finished vehicle audits have been successfully implemented to assess fit-and-finish of body and trim during engineering and manufacturing at Jaguar Land Rover, much more is needed for the company to really excel at customer satisfaction.
“And this is because today’s customer’s assessment of quality now goes far beyond traditional measures of faults-per-vehicle and fit-and-finish that engineers are used to dealing with.
“This includes perceived quality such as long-term reputation, vehicle class, features, repairability and dealership performance.
“Jaguar Land Rover are highly effective at controlling their new product introduction (NPI) process in terms of lead-time and cost, but they recognise they must now raise their game on quality.
“Jaguar Land Rover previously captured the sensory perception of premium quality under the umbrella term ‘craftsmanship’ defined as: ‘The perception of quality experienced by a customer, based on sensory interaction and emotional impact’.
“Craftsmanship includes but goes further than visual aesthetic quality; to include quality perceptions of sound, touch and feel, smell, usability and ergonomics, and customer enhancements through surprise. “These are precisely the type of attributes that are measured in a JD Power study to assess customer satisfaction.”
Manufacturing process capability
“Whilst the vehicle aesthetic design is fundamental to this customer-perceived quality, the delivery of the design into production is also critical and requires high levels of manufacturing process capability.
“Although computer visualization software capabilities are used extensively by Jaguar Land Rover engineers, there are certain components and systems that still benefit considerably from the use of functional models and prototype mock-ups.
“Flexible components made of plastics, rubbers and sheet metals are notoriously difficult to simulate on a computer and complex dynamic functions have also been shown to present considerable problems.
“As a result, relationships with, and inputs from the supply base have had to develop over the past couple of decades, from what was known as ‘arm’s length’ relationships, to ‘partnerships’.
“Whereas it was once common for outsourced parts to be designed and developed solely by the vehicle manufacturer, or to buy in standard, off-the-self supplier proprietary parts, suppliers are now having considerable input into the design and development of black box parts. Therefore, suppliers have an increasingly important role in the delivery of quality.”
How far has Jaguar Land Rover got already in terms of addressing quality issues?
CT: “ Jaguar Land Rover claim that dramatic improvements have already been made with their warranty bill halving last year, and recorded incidents of dissatisfaction are at a record low with current 2021 vehicles.
“It is now chasing a target of warranty costs of less than 4% of revenue but this does not necessarily address the perceived quality experienced by customers, and it will be an uphill battle to totally transform their quality in the electrified future.”
And how does it need to address it going forward, particularly is it continues the journey towards electrification?
CT: “The real opportunity for Jaguar Land Rover now is to develop electric vehicles with inherent quality and top management must embrace this and lead by example to enable project team and function leaders to deliver.
“Electric cars have fewer moving drivetrain parts to break and Jaguar Land Rover’s chief creative officer – Gerry McGovern – has stated: ‘We are reducing the complexity of our vehicles massively. The result will be that fewer things going wrong because the process will be not as complex’.
“But that is making a huge assumption regarding the quality of the vehicle electronic architecture and systems, and more importantly the software, where Volkswagen have experienced difficulties.
“Tesla are some years ahead on battery electric vehicle (BEV) technology and it will take a huge effort to match their quality in this area.
“This must now be a key consideration for Jaguar Land Rover regarding whether to design or buy-in the Jaguar BEV platform.
“Yesterday’s quality may have been an order winner but now is merely an order qualifier.
“And Jaguar Land Rover senior management must deploy quality targets and measures to the project team and function leader level in the company and at its suppliers, and as we know what gets measured gets done.”
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