JLR Dealers at War with Automaker Over New Contracts

Dealers in Europe claim their margins are being eroded and are threatening legal action

Luxury brand dealerships invest huge sums in their showrooms to help create the right environment to separate customers from their money. And they do it because they know the generous margins in the cars, they sell will justify that investment. But Jaguar and Land Rover dealers in Europe claim the automaker is messing with that balance and are threatening to take the company to court.

Automobilwoche reports that Jaguar Land Rover has terminated contracts with its European dealers and has offered new terms that dealers say will leave them much worse off. In Germany, for instance, dealer margins will be cut in half to 9 percent, the report says. Compounding the agony is the fact that the dealers are selling far fewer cars because JLR is struggling to fulfil orders.

In a letter to JLR seen by Automobilwoche, the head of the brand’s European dealer association, Arjen de Jong, complained that the automaker’s new volume forecasts were significantly lower than before and came with worse margins for dealers.

De Jong threatened legal action, warning JLR that if it insists on going through with its plan to introduce the new contracts this spring, the result could be a court battle that has the potential to harm both sides. .

Editor - Information for this story sourced from automotive website Carscoops and Automobilwoche via Auto News

Jaguar is on A Mission to Trim Its U.S. Dealer Network

If the company’s plans to transform into a Bentley-competing brand are to come true, some big changes have to happen.

Jaguars plan to rival Bentley with a three-car line-up of all-electric offerings priced much higher than their existing models with a smaller, pricier, and more exclusive range. This will mean that Jaguar will be forced to shrink its U.S. dealer network, and according to a report by Automotive News Magazine, JLR has begun to whittle down the number of

Jaguar dealers by offering them their pick of hot-selling Land Rovers. According to one unnamed dealer, as many as 40 Jaguar outlets may have already bitten. But the company will need many more to take up this offer if the Jaguar brand is going to be successful at offering ultra exclusivity. At the moment, there are some 395 JLR dealerships in the U.S., with many of them offering both Jaguar and Land Rover products side by side. A company like Bentley or Aston Martin makes do with just 50 outlets, with many of them clustered in upscale markets like Los Angeles, New York, and Miami. This would track with reports that suggest that Jaguar is looking to knock their dealership count by 75 percent, JLR has denied it has settled on such a figure, but it would make sense. If you’re a Jaguar dealer right now, you may be a little concerned. .

Editor - Information for this story sourced from automotive website Carscoops