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The British Automaker – Land Rover
Land Rover is a British automaker, which produces premium all-wheel-drive off-road cars. The concern manages manufactures of cars Jaguar and Land Rover specializing in premium cars. The original name of the British manufacturer is Rover. It is considered the second-oldest company in the world for the production of off-road vehicles after Jeep. Since 2008, it is an affiliate of the Indian company Tata Motors. These days, Land Rover is a dynamically developing large international company representing British automotive brands with the legendary history. The purpose of the paper is to study a British brand Jaguar Land Rover and the importance of its export for both the country and the company itself.
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The history of the company is extremely legendary. The occurrence of the car is obliged to two engineers of the British company the Wilks brothers, the classic military Jeep Willys and conditions prevailing in England after the war (Gould, 2015). Although, the country avoided a direct invasion of the enemy, perennial air raids, bombing by missiles V-1, and ballistic missiles V-2 transformed the island into a state with a fairly distorted economy (Gould, 2015). Britain desperately needed to export its products. Before the war, fast and elegant cars were made under the name Rover. However, after the war, such cars were not in demand. Thus, brothers Wilks got an idea to create an inexpensive and undemanding terrain vehicle, which would be useful to farmers. Land Rover has its origin in the famous American jeeps Willys (Gould, 2015). In fact, it was its prototype. The automotive industry was one of the priorities in the restoration of the UK economy at that time. Brothers Wilks received government approval to resume the production of civilian cars. Apparently, it was the beginning of the Jaguar Land Rover era. The interest in the new Jeep was huge, and ten years later, 250,000 cars went from the production line (Gould, 2015). In such a way, the company became extremely popular.
In the history of the company were both upsides and downsides. The fate of the Jaguar Land Rover was revived after Ford Motor sold the luxury brand to Tata Motors in 2008. In the book Understanding Business Strategy, it is stated that “Tata Motors acquired the Jaguar and Land Rover business from Ford Motor Company in 2008” (Ireland, Hoskisson, & Hitt, 2008, p. 135). Nowadays, the Jaguar Land Rover group comprises three factories and two research offices in the United Kingdom, which employ about 30 thousand people, and taking into account the related companies and a dealer network around the world, there are about 200 thousand people (Holweg, & Oliver, 2016). Therefore, it gives workplaces to a great number of people.
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Jaguar Land Rover has always made an emphasis on the export of its vehicles to various countries around the world. About 80% of all cars of Jaguar Land Rover, which are manufactured at three plants in the United Kingdom, are intended for export (Holweg, & Oliver, 2016). In 2013, the company sold 425,006 units (Holweg, & Oliver, 2016). The largest markets for Jaguar Land Rover are Continental Europe, North America, and China, which totaled 60% of total export sales (Holweg, & Oliver, 2016). In the book Handbook of Industry Studies and Economic Geography, it is affirmed that “The ownership of UK-based Jaguar Land Rover by India’s Tata operating in the premium market has given it direct access to markets in the EU and the US” (Giarratani, Hewings, & McCann, 2013, p. 88). However, the presence in other markets is also growing rapidly.
The company has excellent conditions for the expansion of its exports. Jaguar Land Rover adds new models and expands production outside the traditional British base (Demirbag, & Yaprak, 2015). Due to highly developed economic and trade relations of the United Kingdom with many world countries, Jaguar Land Rover has an excellent opportunity for the successful business abroad. Global sales of Jaguar Land Rover cars rose by 24% to a record high level (Holweg, & Oliver, 2016). This fact makes a company highly competitive on the market.
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The company concludes a number of agreements for the development of its business in different countries. It improves the company’s competitiveness through the expansion of production capacity in various regions around the world. Britain has always been the cornerstone of all business activities of the Jaguar Land Rover. The country remains a center of engineering, scientific, technical, and production operations of the company.
Moreover, the company Jaguar Land Rover conducted large-scale investments in production centers Castle Bromwich, Solihull, and Halewood in the United Kingdom to maintain the launch of its new models, namely Jaguar F-PACE, Jaguar XE, Land Rover Discovery Sport, and Range Rover Evoque (Holweg, & Oliver, 2016). The future plans of the company lie in the expansion of the possibilities of modern engineering and design centers, as well as investments in the National for Automotive Innovation Centre. Sustainable investments of the company Jaguar Land Rover is strong support for the industry of the United Kingdom in the long term.
These days, the political situation in the United Kingdom is rather stable. It has friendly and partnership relations with many countries. Every year, the company signs an increasing number of economic partnership agreements (Holweg, & Oliver, 2016). The company Land Rover has signed an investment agreement with the Government of Slovakia on the construction of the car plant in the west of the country (Holweg, & Oliver, 2016). This agreement is an important step in the global investment strategy in the United Kingdom, India, and China. Despite numerous trade relations of the company, Europe still remains the most prosperous market.
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It is known that these days, several European countries experience a difficult economic situation, which especially relates to the Russian Federation. Due to the economic sanctions, the country has difficulties with exchange rates. This situation affects companies that lead their business in Russia, and Jaguar Land Rover is one of them. Sharp fluctuations in the exchange rate increase international economic instability, including monetary and financial relations. It leads to the fact that the company has certain difficulties in this country. For a company that is driven by exports, the currency eventually determines the entire outcome of the activities. However, before the problems with the exchange rate, the Russian Federation made huge profits for the company as annually a great number of cars were sold there.
Over the past several years, the company Jaguar Land Rover has made significant strides in expanding its production capacity at the international level. In 2014, a new joint venture in China was opened (Holweg, & Oliver, 2016). Moreover, the construction of the plant also began in Brazil (Holweg, & Oliver, 2016). The creation of new overseas plants will allow Jaguar Land Rover to strengthen its presence in the regions with the highest growth potential, protect the company from currency fluctuations and become even more efficient and competitive enterprise in the world.
Export and import are the main directions of international trade. Export plays a leading role in the financial success of Jaguar Land Rover. As it was already mentioned, a large share of production of the company is aimed at foreign customers. This fact allows for creating thousands of jobs at the company. Over several years, the company has increased its staff by more than 25,000 people up to 35,000 people and has invested about 10 billion pounds in capital expenditures and new product development (Holweg, & Oliver, 2016). The company claims that it plans to increase its annual car sales to about 850,000 units by 2020 (Holweg, & Oliver, 2016). Consequently, it will increase the competitiveness of the company. Import is also extremely important for the company as some car parts are imported from other countries. Thus, the company should establish trade relations with many countries to ensure the export and import of the vehicles and its parts.
Jaguar Land Rover is actively involved in international trade due to several reasons. First of all, it increases the competitiveness of the company. It also gives an opportunity to open new plants and provide more people with working places. Furthermore, it gives more profits to the company as the inside market cannot give such possibilities as the international market. Despite the fact that Jaguar Land Rover is highly popular in different countries, the native United Kingdom is not an exception. In contrast to the international market, the domestic market still occupies the main niche in the sale of Jaguar Land Rover’s cars.
In marketing both domestically and in foreign markets, basic forms and methods of the practical application of marketing in enterprises can be used to the same extent. Jaguar Land Rover uses the same research methods of demand, supply, and analysis of its activities and competitors to build production and sales activities grounded on the same strategic alternatives. However, international marketing has a number of distinctive features, which are due to the specifics of individual countries’ markets (Demirbag, & Yaprak, 2015). It is associated with the fact that each stage of marketing activities in the global market requires taking into account not only the socio-economic and psychological but also national and historical features of the demand. In the analysis of foreign markets, a significant place is occupied by the problem of adapting the production parameters to the conditions of its use in one or another country. Land Rover faces specific problems associated with the selection of forms of the entry on a new market, including the export license for the production, formation of joint ventures, opening a business abroad, and investment (Demirbag, & Yaprak, 2015).
Due to different socio-economic, psychological, and historical features of various countries, Jaguar Land Rover differently advertises and completes market research in the core target markets. For each local market, the company develops a unique strategy for brand development. The development strategy of the brand in a particular country is dependent on many of the studied parameters such as the appearance of the target audience, its way of life, thoughts, activities, and work. Land Rover conducts a great number of studies, where experts ascertain the interests of the target auditory (Demirbag, & Yaprak, 2015). On this basis, the basic message of the brand is developed. For example, Jaguar Land Rover when advertising Range Rover in the United Kingdom has used Queen Elizabeth knowing the love of Englishmen to the royal family (Demirbag, & Yaprak, 2015). However, in other countries, this advertisement would be inappropriate due to the controversial opinion of people from different countries about the members of the royal family. In the United States, there was a different advertisement showing a car that drives through puddles, and along the roads and noisy streets. This advertisement is intended for the US as it is a noisy country that needs such a car as Land Rover.
Jaguar Land Rover had several owners. On the threshold of the new millennium, Land Rover became part of the multinational family of Ford (Andersen, & Poulfelt, 2014). It invested great sums in the development of the brand, creating conceptual and production models. Nevertheless, the economic crisis in the automobile industry of the United States led to the fact that Land Rover was sold to the Indian engineering concern Tata (Andersen, & Poulfelt, 2014). The company has offices and plants in different countries. It is well-known that the multinational company has both advantages and disadvantages. It has an impact on economic growth, the distribution of productive forces, the intensification of scientific and technological progress, and the growth of production efficiency (Demirbag, & Yaprak, 2015).
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The multinational company also has a great role in terms of improving the forms of management and organizational structures, systems of control, and management of the marketing, production, and personnel potential of Jaguar Land Rover (Demirbag, & Yaprak, 2015). The multinational corporation seeks and develops new markets and effectively uses resources. Certain difficulties may arise due to cultural differences between the United Kingdom and India (Demirbag, & Yaprak, 2015). Natural features of the countries are also of great importance, including mineral resources, water, and climate. The level of economic development is extremely different, which may cause some difficulties.
These days, many experts are concerned about the impact of European political and economic integration on the business. Integration is an objective process of unification and mutual adjustment of countries in different spheres of social life. Integration covers economics, politics, and the social sphere (Andersen, & Poulfelt, 2014). Integration processes are one of the trends of the modern global economy. The conclusion of regional integration agreements is dictated by the desire of the countries that are participants of these agreements to obtain certain economic benefits from integration and create favorable conditions for the development of the industry (Andersen, & Poulfelt, 2014). Integration processes may provide advantages to different companies, including Jaguar Land Rover. The main advantage is the elimination of customs duties, taxes, and fees in the mutual trade. In other words, it is the rejection of the application of tariff instruments of trade policy towards partner countries. In turn, it will contribute to the growth of mutual trade between them and cause the effect of the creation of the trade. Economic integration contributes to the access to Land Rover’s production to a large number of markets. Integration also creates favorable conditions for the development of competitive products of the company. Accordingly, these processes stimulate the technological renovation of national production due to the increased flow of investments.
Every multinational company can face certain problems with the distribution of its production, and Jaguar Land Rover is not an exception. Distribution is a way of the physical movement of export products and its legal registration between production in one country and the consumption of the other. For example, exporting cars, Land Rover must obey the laws of the United Kingdom on exports and legislation on the import of buyer countries, as well as the general laws of the international business. The same as Toyota, Jaguar Land Rover has introduced the principle just-in-time in its production process (Holweg, & Oliver, 2016). This principle allows delivering parts of the car on the assembly line for thirty minutes. Thus, it allows for producing cars extremely quickly. In fact, one car is produced every four minutes (Holweg, & Oliver, 2016). This speed allows producing about 80 cars per day (Holweg, & Oliver, 2016). After this, cars are transported in different countries. Jaguar Land Rover has full control of the product distribution process and can quickly respond to changes in customer requirements.
These days, the machinery and equipment market is developing under the influence of the most progressive forms of international specialization and cooperation gathering specialized producers in international scientific, technical, and industrial cooperation. The organization of a reliable after-sales service of machines and equipment is a prerequisite for the sale of products and the conquest of positions in the world market. Machinery and equipment are supplied to foreign markets as fully assembled and disassembled. In the latter case, the frill of finished products is conducted directly in the importing country. Therefore, Jaguar Land Rover completely meets all the demands of the modern market.
The company constantly pleases its customers with new products. Thus, in July 2015, a new contact sport sedan Jaguar XE was released (Holweg, & Oliver, 2016). This fact allows occupying an extremely important segment for the company of mid-sized sedans which was not presented in Jaguar earlier. In December, an updated representation of sedan Jaguar XJ appeared on the market (Holweg, & Oliver, 2016). Although 2015 was held under the auspices of the 80th anniversary of Jaguar, the brand Land Rover also pleases its fans with new premiers. In March, a universal Land Rover Discovery Sport appeared in the salons of official dealers, combining advanced technologies, compact size, and functionality of the legendary family Discovery (Holweg, & Oliver, 2016). In the fall of 2015, the updated family Range Rover went on the sale, including Range Rover Sport, Range Rover, and Range Rover Evoque (Holweg, & Oliver, 2016). The company provides customers and admirers with beloved luxury off-road vehicles completed with new engines, complete sets, and options packages.
Land Rover originates from the famous American jeeps Willys. They were the inspiration for the new British off-road vehicles created shortly after World War II by the company Rover. Over time, the company became part of the Jaguar Land Rover owned by the Indian automotive group Tata Motors since 2008. These days, the group is a recognized leader in the manufacture of exclusive reliable off-road vehicles and luxury sports sedans. The company completely meets all the demands of international customers creating new models and improving the old ones.
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