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Jaguar hood ornament on the front of a 2009 XF model. (Scott Olson/Scott Olson/Getty Images)
Jaguar hood ornament on the front of a 2009 XF model. (Scott Olson/Scott Olson/Getty Images)

Driving It Home

Jaguar recovering, needs new small models to compete Add to ...

Here at Jaguar's headquarters in the British Midlands there is a small but growing buzz about the future of Jaguar and its Tata-owned stablemate, Land Rover.

In a nutshell, Jaguar and Land Rover are profitable and hard at work on new models. Jaguar-Land Rover Canada president Lindsay Duffield says the company is investing about $1-billion a year on some 40 major engineering projects. New models and new technologies are coming and coming fast.

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"It's crazy," says Jaguar design director Ian Callum of the hectic activity in his studio.

Here's the most important piece of the story: The maker of the XJ, XK sedans and the Range Rover sport-utility vehicles was severely hurt by the economic slowdown, though Jaguar-Land Rover's performance started recovering in 2010. Sales are expanding in China and demand started growing slowly in Europe.

The bottom line is that JLR posted a profit of £275-million ($429-million) in the past quarter, up from £55-million ($85-million) a year earlier. JLR is making money.

The next step is to grow the lineup. Jaguar may develop a small sedan to compete with BMW's 3-Series - something it tried a decade ago with little success. Jaguar is also considering a small sports car. The two might share the same platform or mechanical underpinnings.

What is clear is that Jaguar needs a broader lineup and lower-priced models. Company executives say they envision a small sedan below the XF that could compete against the 3-Series or the Audi A4/A5.

The small sedan would be for profitable growth, while the small sports car would be for image. Clearly Jag needs both.

Timing? The two are probably four-plus years away before a formal launch. And Jaguar should take its time moving forward.

We all know what happened the last time Jag tried a small sedan. The Ford Mondeo-based X-Type that debuted in Europe 10 years ago was a sales disappointment.

A smaller, lower-priced Jag would still need to be elegant in design and loaded with technology. Jaguar may be profitable now, but if future models do not have what company officials call "a sense of occasion," they have no hope competing against the established German luxury brands.

Yes, there is a healthy buzz here in Jaguar-land, but it's tempered with caution. The dark days of the late 2000s are not far from anyone's mind.

Follow on Twitter: @catocarguy


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