All the cars are fantastic in the premium segment. The next battleground is ownership experience, and Jaguar is pulling ahead.
This past March Jaguar passed Lexus to become the top brand in J.D. Power and Associates’ Customer Service Index. In a nutshell, customers that have their vehicles serviced at Jaguar are the happiest customers in all of the car kingdom. That is just one piece of the ownership experience. Jaguar has just moved to secure another key piece of the puzzle.
In addition to leaving the dealership happy after a visit, it is also nice to leave with the contents of one’s wallet intact. Jaguar has just launched a first in the U.S. auto industry. A five-year, sixty thousand mile bumper to bumper warranty paired with scheduled maintenance over that period. This means that for all intents and purposes, a Jaguar owner has a fixed cost of ownership for five full years. That is a year longer than BMW, which offers a similar package. The benefits of this go beyond just the first owner.
Roughly half of Jaguar cars are leased. Typical leases run 39 months. Jaguar now has the opportunity to not just take care of the first owner under the full warranty and full included maintenance package, but to then transfer the 21 remaining months to the second owner. Imagine the benefits of buying a pre-owned Jaguar after it has depreciated by about 35 to 40% and knowing that if anything goes wrong for almost two years repairs will be completely free of charge. This is a formula Lexus figured out and has put to good effect. Lexus couples a very strong Certified Pre-Owned program with its four-year new car warranty. However, Lexus does not offer the included maintenance.
Another move Jaguar is making will also help it keep customers happy. Jaguar has had a fleet that started in the mid $60K range. That will change when the new XE sedan starts in the spring of 2016 as a 2017 model. This new BMW 3-Series sized car will start in the high $30K range. The New F-Pace compact crossover also arriving next year starts in the low $40K range. These new models make it possible for Jaguar to have a cost-effective captive fleet of new loaner Jaguars for all of its customers that have service needs requiring a stay of more than 1 hour. Lexus does this now.
As Tesla found out the hard way, it is not cost effective to keep a loaner fleet of your own cars when they cost nearly $100K on average. Jaguar’s new XE will enable its dealers to have as many cost-effective loaners as it needs. Those cars will also have four full years of warranty left when they are returned to the dealership showroom for sales as low mileage, one-year-old pre-owned vehicles.
Buyers in the premium segment assume the car they drive home will be outstanding. Many do look for certain performance features, but many simply don’t care much about that. However, what every premium car buyer wants is to feel special and to have an experience, or many experiences with the car that they know is outstanding and beyond what mainstream brands can offer. Ask anyone who tests cars and they will tell you that there are no more bad premium vehicles. BMW, Audi, Lexus, Mercedes, Jaguar, Infiniti and others all make outstanding vehicles. More and more they all share similar specifications. The real battleground is the experience drivers get from owning the vehicle. The interactions with the physical dealership are one important part of that. Quality and reliability are also very important. Lexus has been the leader up until recently in both of these areas. Jaguar may have just passed Lexus with this newest move.