Automaker’s priority: ‘neither scale nor profitability’
Print Edition
BRITISH premium carmaker Jaguar Land Rover, as part of a global expansion, is set to begin its first overseas production, to be sited at a plant in China with its domestic partner Chery.
Chris Bryant, president of Chery Jaguar Land Rover, hasn’t disclosed what car models will be produced at the co-owned plant in Changshu, Jiangsu Province, or how much of the factory’s 130,000-unit annual capacity will be tapped when production is scheduled to start in the fourth quarter.
Bryant agreed to sit down with Shanghai Daily to share his expectations for the new venture.
Q: The biggest three premium carmakers in China manage their joint venture businesses in different styles. Some ventures are led by the Chinese partner, some by the foreign partner and some with management duties evenly split. Which of these styles do you think best suits Chery Jaguar Land Rover, or do you want to create your own management style?
A: For close collaboration, I don’t think you can be successful in the long term with a dominant partner. You need to recognize the strengths of each side of the partnership. In our 50-50 cooperation, Jaguar Land Rover provides products and quality systems, while Chery provides the local market knowledge.
We have spent a lot of time developing business behavior, cultural respect, professional integrity, and a data-driven, decision-making process to create the company’s vision and identity. Earlier this year, the number of our employees surpassed 1,000. Zhu Guohua, deputy president of the company, and I always attend orientation meetings for new employees so that we have the opportunity to engage with them personally. I think that is something quite unique.
Q: What will be the localization ratio of auto parts used in Jaguars and Land Rovers made in China? A recent Aston Martin safety recall exposed the risks of sourcing auto parts from China. Does that worry you?
A: We are very proactive in localization, but numbers are not that important. In China we use the same standards, processes and expectations that Jaguar Land Rover uses at all its supply bases, and part of our team are experts from Jaguar Land Rover’s supply quality function in the UK.
We have gone through detailed analysis of China’s supply capability, and we are now helping our suppliers develop the capacities to deliver what we want. China’s supply bases have developed rapidly, and the location of our joint venture is a really good one for attracting world-class suppliers. We have been really pleased with the progress we have made with them.
Q: Manufacturing is all about economies of scale. As Jaguar Land Rover starts its local production to catch up with the biggest premium carmakers here, what criteria will your joint venture consider as its priority — sales volume or profits?
A: Our priority is neither scale nor profitability, but rather quality. Jaguar Land Rover is relatively small compared with some of its competition here, which may continue to be the case for sometime. To be the No. 1 premium automotive factory doesn’t mean we have to be in No. 1 in terms of volume, cost or delivery. It can mean that we are considered a preferred choice because of the aspirational brand experience we provide.
The performance of our business comes down to the quality of suppliers, the facilities we build in Changshu — which is a benchmark across Jaguar Land Rover facilities, with up to an 87 percent automation rate in its body shop — and also the mindset of our people who are motivated to delivering premium products. We recruited our first key workers 18 months ahead of our production inauguration and sent them to the UK for training.
We will not launch the joint venture unless the quality of the products is equal to those imported from the UK.
Q: Jaguar Land Rover seems quite determined to unify the distribution channels for locally produced and imported cars. Can you shed some light on this subject?
A: We are forming a joint organization with Jaguar Land Rover’s national sales company to make sure we provide customers with seamless brand experience. It is not a legal entity, but a way of working together. To sell imported and locally produced Jaguar Land Rover products at the same time, a dealer needs to contract with two separate legal entities: Jaguar Land Rover and Chery Jaguar Land Rover. The joint venture sales network will be in place well in advance of the launch of our first product.
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