The Freelander 2, the first Land Rover model designed and built by Ford, rolled off the production line last month, marking a crucial point in the marque's history.
The event also coincided with Ford's third-quarter figures; its worst for 14 years. The results, released at the end of October, revealed that losses had hit $5.8bn (拢3bn) compared with $284m (拢149m) for the same period last year.
The Premier Automotive Group (PAG), the parent of Land Rover as well as Volvo, Aston Martin and Jaguar, did particularly badly in the quarter. It reported a pre-tax loss of $593m (拢311m), up from $108m (拢57m) the year before, due mostly to the cost of Land Rover and Jaguar warranty repairs.
Land Rover has been dogged by quality problems and was named worst car for long-term reliability and affordability, for the second year running, in a recent UK What Car? poll. It also came second to bottom of a JD Power survey for customer satisfaction. Land Rover now faces the challenge of convincing consumers that it has left its reputation for poor quality behind.
Political pressures on the 4x4 sector are also mounting. It has long been targeted by green lobbyists, but such environmental concerns are now beginning to take centre stage. Green taxes are being mooted by all the main political parties, London Mayor Ken Livingstone wants to hit 'gas-guzzlers' with higher congestion charges and Richmond Council plans to charge drivers of these vehicles more for parking.
However, Land Rover has hit back, launching a CO2 offset package - an optional levy on the price of a new car, used to fund environmental projects.
Land Rover's marketing in the UK, led by its ad agency RKCR/Y&R and direct shop Harrison Troughton Wunderman has centred on the 'Go Beyond' campaign, which taps into consumers' sense of adventure.
The marque has explored a number of innovative communication ideas and scored an auto-industry first with the launch of a broadband-based TV station.
We asked James Pool, partner and director of the Opel/Vauxhall pan-European team at ad agency DLKW, and Ben Rachel, planning director at Clark McKay and Walpole, which handles direct marketing for Porsche and Peugeot, where the brand should go next.
VITAL SIGNS - UK CAR CUSTOMER SATISFACTION INDEX SURVEY SCORE
Manufacturer 2006 2005 2004 2003 2002
Lexus 873 848 878 861 860
Skoda 842 847 852 836 839
Toyota 838 835 840 848 843
BMW 820 829 836 838 838
Volvo 815 817 818 799 804
Audi 808 810 817 810 818
Industry average 791 786 797 794 791
Land Rover 762 755 756 750 744
Source JD Power and Associates
DIAGNOSIS 1 - JAMES POOL PARTNER, DLKW
From its humble beginnings as a Welsh utilitarian tractor, Land Rover has become an iconic international brand.
It promises adventure through strong, safe, secure, beautifully designed products, with consistently great marketing through all channels.
It is a focused brand that really knows its audience. But, real or not, the growing perception is that its vehicles guzzle far too much gas - particularly when idling on the school run.
Politicians are committed to taxing their way out of the green problem by hitting 4x4 drivers' pockets, and judging by what was on show at the recent Paris Motor Show, the Japanese are looking to offer cuddly crossovers that provide the 4x4 shape without the eco-guilt.
Land Rover's response, the CO2 offset programme, is laudable but does not tackle the real issue. To compound matters, Ford is refusing to rule out a sale of Land Rover, which suggests neither the will nor the cash is there to create products that will fuel Land Rover's spirit of adventure in the years ahead.
REMEDY
- Keep ownership of 'adventure'. It is an emotional proposition that will shield the brand from the worst of the criticism.
- Invest in NPD and engineering capability. Hybrids are a must; mountain bikes might be nice.
- Find a totemic, affordable, credible green strategy. Putting an optional tax on the cost of new Land Rovers and using it to fund low-emission cooking stoves in India is not it.
DIAGNOSIS 2 - BEN RACHEL PLANNING DIRECTOR, CLARK, MCKAY AND WALPOLE
Land Rover's real problem is that it is part of Ford's Premier Automotive Group, which has suffered massive losses and left Land Rover with a rather tainted reputation.
Ford can't do luxury; putting the world on wheels is its heartland. So the sooner Land Rover can be independent of its troubled parent, the better.
But the brand is the jewel in PAG's bedevilled crown. It has a vibrant product range and the Range Rover Sport is the latest must-have bling.
The current raft of communications is putting the brand on the right track, but it has some serious, specific challenges to address.
Its big issue is that it is bottom of the reliability and affordability list, with a rising number of failing head gaskets and warranty repairs needed on Freelanders.
Also, there is a common misconception that 4x4s are the worst polluters, but this is not necessarily the case; the emissions from a 2.0l diesel engine Freelander are 205g/km, compared with 209g/km from a 2.0l petrol engine VW Beetle.
REMEDY
- Use PR to reinforce that Land Rover has invested heavily in improving reliability and affordability.
- Warranty work is an enormous opportunity. Deal with problems professionally, reliably and empathetically; it will turn would-be detractors into advocates.
- Start pioneering alternative fuel options and shout about it.
- Find some private equity and effect a management buy-out.