Jaguar is undergoing a radical transformation, deliberately moving away from its failed attempt to compete directly with German and Japanese luxury brands. For years, the British automaker pursued a strategy of challenging BMW, Mercedes-Benz, and Lexus in the high-volume premium market – a strategy that ultimately proved unsustainable.
The Failure of the Previous Approach
Jaguar’s sales figures demonstrate the extent of this underperformance. In 2019, the company sold just 31,051 vehicles in the U.S., a tiny fraction compared to its rivals: BMW (324,000), Mercedes-Benz (over 357,000), Lexus (nearly 300,000), and even Audi (over 210,000). This disparity highlights the core issue: Jaguar simply could not compete on volume while maintaining profitability.
As Rawdon Glover, Jaguar’s managing director, bluntly admitted to Top Gear, “Jaguar didn’t work commercially.” Continuing with the same approach would have led to further decline, as evidenced by the brand’s continued sales slump and near-zero profitability in recent years. The situation was so dire that former CEO Adrian Mardell informed investors that the existing lineup was unsustainable long-term.
A New Path: Ultra-Luxury Positioning
Faced with this reality, Jaguar is pivoting sharply upwards. The company is abandoning the volume luxury segment to focus on the ultra-luxury market, positioning itself between mainstream premium brands and the ultra-exclusive Rolls-Royce. This means drastically increasing prices, with the launch edition of Jaguar’s next vehicle priced at £140,000 (approximately $187,000 USD). The target average brand price is set at around £120,000 ($160,000 USD).
This move is a high-stakes gamble. Jaguar has effectively ceased production of its old lineup and is betting entirely on this new direction. The company has little room for error, but also little to lose given its previous struggles.
“The previous iteration of Jaguar didn’t work commercially,” admits Glover. “We were at a crossroads; continuing as we were simply wouldn’t work.”
The shift signals a fundamental re-evaluation of Jaguar’s identity. By embracing ultra-luxury, the brand is attempting to redefine itself not as a competitor to BMW or Mercedes-Benz, but as a distinct player in a more exclusive, higher-margin segment.
This represents a calculated risk. While the ultra-luxury market is smaller, it offers the potential for greater profitability and brand prestige. The success of this strategy will depend on Jaguar’s ability to deliver a compelling product that justifies the significantly higher price tag.
