Why some Jaguar dealers are being asked to give up franchises

Haig noted that most Land Rover dealers did end up acquiring nearby Jaguar stores and then built new, combined facilities.

But dealers who made that investment and now decide to give up the Jaguar brand have a few options for what to do with the empty half of the showroom.

Andy Vine, a Jaguar Land Rover dealer in Louisville, Ky., says dealers can use the space to highlight certified pre-owned vehicles or to separate luxurious Range Rovers or exclusive performance-oriented SV models from the more utilitarian Land Rovers.

“They are basically breaking the Land Rover line into three pillars,” Vine told Automotive News. “Range Rover, Velar, Range Rover Sport and Evoque. Discovery and Discovery Sport, and then the Defender 90, 110 and 130. So you can build a showroom right now, no problem.”

Jonathan Sobel, owner of Land Rover Manhattan in New York, said he resigned his Jaguar franchise in February.

He declined to comment on when he was first approached by the automaker or what he received in exchange.

Sobel, who acquired the store in 2017, said the dealership has no remaining new Jaguar inventory.

“Working with our factory partners, we retain the ability to service Jaguar vehicles and sell certified pre-owned ones so that we can better meet the needs of our customers,” Sobel said.

The showroom area previously used for Jaguar is now additional space for Land Rover, Sobel said. Any signage or display items that reference Jaguar are in the process of being removed, he added.

Sobel estimated that at its peak, Jaguar represented between 15 and 20 percent of the dealership’s new-vehicle sales.

Like most automakers, Jaguar Land Rover no longer reports monthly sales. But Jaguar sales have been skidding for years because of product misfires, such as the discontinued XE compact sedan and slow-selling I-Pace electric crossover, and production interruptions caused by COVID-19 and the microchip shortage. In 2022, JLR sold an estimated 9,128 Jaguars in the US, down 29% from 2021.

Joe Ozog, president of Ozog Consulting Group in Scottsdale, Ariz., said his firm has two separate buy-sell transactions involving Jaguar Land Rover dealerships on hold because of the uncertainty surrounding Jaguar.

Ozog said he has recently spoken with over a half-dozen JLR dealers across the country, and each said they’re keeping the Jaguar franchise for now.

“They’re not excited about it, and it creates uncertainty,” Ozog said. “And uncertainty is never good in the auto space, especially on the retail side.”

Haig said some dealers may believe there could be another change in JLR management and a reversal to keep the brand positioned where it is currently.

“It’s just a tough pill for JLR dealers to swallow,” Haig said. “They were forced to overpay for these Jag franchises, they were forced to build an extremely expensive and needlessly large facility to handle this plan for Jag to be more of a volume brand. Now they’re being asked to give up this franchise and in return get a few more Land Rovers.”

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