 | Home > Off Topic > How To Destroy A Great Global Brand And The Cult Of Ferrari |
 
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018   
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Picked up from Chris Harris.
It's a difficult read, but makes some very interesting points, and it's worth considering how JLR have approached some of the same issues, taken decisions and suffered setbacks. https://seekingalpha.com/article/4325637-h...of-ferrari chris harris (@harrismonkey) Tweeted: This is a fascinating read about Ferrari. I know little about stocks, but this chimes with all the concerns many of us have about the balance between increased volumes to keep shareholders and money markets happy, and making too many cars to remain special https://t.co/j1hseqbw6x https://twitter.com/harrismonkey/status/1232769071638294530?s=20 |
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27th Feb 2020 9:32am |
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| Grenadier Member Since: 23 Jul 2014 Location: The foot of Mont Blanc... Posts: 5765  
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Interestingly, and I say this with no understanding of business/economics or insider experience of the motor industry, I’ve always maintained this is the reason JLR keep going bust. They’re a ‘premium’ brand, but with two inherent failings. They’re not quite as ‘premium’ as Ferrari, McLaren etc, or even Porsche, but they’re also producing too many premium units without the financial support of vast numbers of lower value car sales. So their economies of scale are wrong. McClaren and Ferrari and Porsche can keep things ticking over with low unit numbers at very high prices, whilst BMW, Audi and Merc can sell their premium models in the same numbers as JLR, but have the financial support by selling gazillions of hatchback diesels. JLR does neither, falls in the gap between the two business models, and suffers as a result. For them to survive, they’d need to bolt-on to a mega brand (much like Lambo, Bentley, RR and Bugatti) to rework those economies of scale, as their models aren’t nearly premium enough to follow Porsche’s model, let alone the models of Ferrari, McLaren, Koennesisgahggaheghagfshhahhehegg etc. Just my layman’s opinion. Monsieur Le Grenadier
I've not been everywhere, but it's on my list..... 2011 Puma 110DC - Corris Grey |
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27th Feb 2020 9:43am |
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018
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Goods points well made
A concept I had not really thought about before was that of Pricing Below Demand - "By carefully constraining supply below the level of demand, and pricing well below what customers would have been willing to pay, the company has historically managed to maintain not only its exclusivity, but it has also reduced the rate of depreciation for its cars compared with other exotic car makers. Effectively, by leaving some money on the table for their dealers and customers, rather than trying to squeeze every possible dollar on incremental profit, Ferrari created the illusion of exclusivity and the obvious result of their vehicles having better stabilized residual values. Additionally, this strategy has helped reduce the cyclicality of their production thereby helping the company avoid the fate of competitors such as Lamborghini and Aston Martin who have gone bankrupt multiple times." For new buyers, I'm guessing they would like JLR to better appreciate this point. |
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27th Feb 2020 10:50am |
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| OsloBlue Member Since: 14 Jul 2018 Location: Essex Posts: 822 
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Not too wrong grenadier
High quality low quantity High quantity low quality But these lines are now blurred with finance so that Mercedes, Audi and BMW are now affordable and in my opinion their premium status is being lost apart from certain products. JLRs finance is still unaffordable and is now producing more quantity whilst trying to retain quality. But there is not enough demand for that increased quantity as their products are still unaffordable. The analogy is when masarati went from very low output to moderate output but quality took a toll. I'm on IG: https://www.instagram.com/osloblue42/ Current: TD5 '110 "Lucinda" Thread here: https://www.defender2.net/forum/topic62562.html  |
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27th Feb 2020 10:53am |
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| 22900013A Member Since: 23 Dec 2010 Location: Oxfordshire Posts: 3140 
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Consider too that big companies like Ford and Mercedes-Benz are big producers of commercial vehicles. Indeed M-B is the biggest commercial manufacturer in the world. That market is much less fickle and will always be there as a fallback if the car market goes quiet. If (really its when) big 4x4s become the cars nobody wants LR doesn't have a fallback as they don't sell anything else. Seems very risky to me. 2011 110 USW
1973 Series III 1-Ton 1972 Series III 1-Ton Cherrypicker 1969 IIA 1-Ton 1966 IIA 88" |
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27th Feb 2020 11:16am |
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| markb110 Member Since: 22 May 2010 Location: Guildford Posts: 2530  
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Let’s not forget the company personal lease buyers
As more companies have moved away from company cars to personal leases the price for Land Rovers is too high for many. Only once when I was an account manager could I have a sniff at a bottom spec Freelander 2 as long as I had no optional extras. At the time I was allowed a budget of £26,500 When I was doing 36k miles a year a bog standard car was not even something I would consider especially when I could get a loaded S Line A3. Also even then fleet managers where concerned over miss fuelling due to petrol being put into a diesel tank then going through a super heated cat. Back then perk drivers were told to take a petrol car, higher mileage drivers were ok with diesel. So in a nut shell LR have missed out on this market and a possible renewal every three years |
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27th Feb 2020 12:51pm |
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| Rashers Member Since: 21 Jun 2015 Location: Norfolk Posts: 3361 
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Spot on Grenadier
Also a lot of valid points from all of the other replies.
Osloblue, I agree that the likes of BMW, Audi and Mercedes have become affordable. I think this is at the expense of the likes of Ford. All of our Contracts Managers had Ford Sierras. LX Models. The Opps Manager had a GL. The Director, a Ghia, or Ghia X. By the time I left, people were driving around in everything, but Fords. I was unique in having a Focus Estate, but in all fairness, the two Skoda Octavias I had previously were far better than the Focus and I'm not sure I would have had another. We used to run Transits, but they had all been downgraded to Vivaros (which weren't that bad and the engineers liked them). With Personal Leasing, as has been said before, the value of the car is not important, its how much a month you can afford and that's where the likes of BMW. Mercedes and Audi are coining it in, and perhaps JLR has nothing to offer those people in that price range? |
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27th Feb 2020 2:16pm |
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| Zed Member Since: 07 Oct 2017 Location: In the woods Posts: 3062 
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Although JLR present themselves as a prestige brand they clearly are not. They are an aspirational brand. However that is a good thing financially because combined with cheap finance deals it has made it possible for people on middle and low incomes to 'buy' their cars, which in turn has allowed them to shift ever greater numbers. The downside is that because their business model is based around the lease system the quality of product isn't nearly as important as releasing newer model for customers to 'trade up' to. WARNING.
This post may contain sarcasm. Last edited by Zed on 27th Feb 2020 3:55pm. Edited 1 time in total |
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27th Feb 2020 2:37pm |
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| Huttopia Member Since: 23 Feb 2016 Location: West Midlands Posts: 1969
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Quality is the biggest issue for JLR in my view. You don't come bottom of the reliability survey by chance, it is due to poor engineering / build quality / customer experience. On my run back from France last week, no prizes for guessing which brand I saw most of on a low loader.
A great shame. |
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27th Feb 2020 3:38pm |
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| Tim in Scotland Member Since: 23 May 2007 Location: The Land that time forgot Posts: 3753 
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Another issue for LR (less so Jaguar) is that senior management don’t give a toss about the people who buy their products - they dis-own the cars as soon as the dealers take then out if the storage compound after build, their “money has been collected why do we need to care attitude” is another thing that is putting off repeat buyers and when potential new to brand buyers read forums like this and see what current owners put up with they walk away. If Gaydon management got out if their offices and free company cars and were seen to be engaging owners things might change. Just look at the postings that guy Agnew has been putting up on Twitter, he doesn’t want to answer any of the questions that are important to people looking to buy a New Defender, simply ignores them or threatens legal action Pangea Green D250 90 HSE with Air Suspension, Off-road Pack, Towing Pack, Black Contrast roof , rear recovery eyes, Front bash plate, Classic flaps all round, extended wheel arch kit and a few bits from PowerfulUK Expel Clear Gloss PPF to come
2020 D240 1st Edition in Pangea Green with Acorn interior. Now gone - old faithful, no mechanical issues whatsoever ever but the leaks and rattles all over the place won’t be missed! |
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27th Feb 2020 4:11pm |
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| 90 Dreamer Member Since: 13 Jul 2019 Location: Oop North Posts: 2057 
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have you a link to his @ Twitter handle please?? intrigued.....
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27th Feb 2020 4:14pm |
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| Rashers Member Since: 21 Jun 2015 Location: Norfolk Posts: 3361
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Remember B/L, Austin, Rover? My Dad bought a Maestro in 1983. What an absolute pile of poo. It leaked, it ran badly, it rusted, the main dealer was about as helpful as a cornered rabid dog. He drove it running like a dog for three years - and well out of warranty before the dealer exclaimed that he needed a new ECU. He swore that he would never buy another car of that marque. I got a Rover 214 (with a K series engine) about ten years latter. What a cracking little car! It had its issues, but it was generally a good motor and I enjoyed driving it. But, there was no going back for my old man who just tared the brand with his experiences. He wasn't backward in coming forward about telling his experiences to others. Look what happened to Rover? I couldn't believe they would go under. How many others were there like my Dad who had had their fingers burnt by poor design, poor build quality, indifferent dealers. Does any of this look familiar? |
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27th Feb 2020 4:25pm |
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018
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Have a look here: https://www.defender2.net/forum/topic71000.html All the 1st cars are going to staff... |
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27th Feb 2020 6:16pm |
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| 90 Dreamer Member Since: 13 Jul 2019 Location: Oop North Posts: 2057
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Cheers
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27th Feb 2020 8:23pm |
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