What are the reasons behind the company's decision to establish a subsidiary in Mexico?
Mexico is the most competitive market in Latin America, possibly in America. It is a market in which almost all the brands are present, with a strong influence at the corporate level from the US. There are extremely powerful automotive groups, a high concentration at the distribution level—60 distributors can be brought together to make up 70% of the market, and a high level of price competitiveness and service provision. An extremely high percentage of the 200 main Mexican leaders in all sectors drive Range Rover, which is a result of the great work that was done by positioning the brands during our period as importers. Being a subsidiary allows us to have faster logistical flows and greater representation to give more weight to the decisions that have to be made in Mexico with respect to the global total. The main part of a brand is the experience one generates around the cars for customers. Land Rover is the off-roader par excellence worldwide, and there is an almost magical universe around the brand, similar to Jaguar, though in a world of sportiness and urban luxury. One needs all the support of the main headquarters in order to convey this. Thus, being a subsidiary gives us much more capacity to be able to offer customers these unique experiences that only these brands can offer.
What impact will the creation of the subsidiary in Mexico have for the final consumer of the brand?
The impact on the final consumer is clear: greater stability and prices in pesos and a historic opportunity to make the brand accessible and help all those who want the brand to enjoy it. Therefore, we had to start selling in pesos and provide the service that our clients deserve, and what clients will start to feel from now on is a more regular logistic flow. We are clear that if we want to grow here, we have to make ourselves available to clients to show them a Land Rover or Jaguar and make the purchase easier. As a subsidiary, we will work on financing, our positioning, and how to make our customers feel unique so they trust us and feel part of the brand. In order to do so, we have to place all our resources on the table and be completely aligned with what Jaguar and Land Rover offer worldwide.
How do you expect the importance of the Mexican domestic market for Jaguar Land Rover's global strategy to evolve in the next years?
The premium market in Mexico, despite the fall of the global market, continues to grow, albeit more slowly. However, in 2017 Mexico became the first premium market in Latin America, ahead of Brazil, and this is not a circumstantial situation but rather a structural one, since the Mexican market will grow in parallel or surpass the Brazilian market in the coming years. Within the premium/luxury market, the luxury market weighs much more in Mexico than it does in other markets such as Brazil. The growth of Jaguar Land Rover as a brand was the fastest growing in recent years within the premium segment worldwide and that was achieved by being faithful to our brand positioning. We want to remain a moderately accessible luxury item; we will not be high premium. Our ambition for 2018 is to double our sales. It seems like an ambitious goal; however, it is fully achievable. In 2018, we will bring in six new products and we have a network that has an in-depth growth plan.
What are your main objectives in terms of innovation, in particular to reduce the carbon footprint of the vehicles you produce?
Innovation in the group for the two brands has three pillars. The first is that we are fans of cars and will not give up making cars exciting and giving drivers memorable experiences. The second is based on our customer-first policy. Land Rover's commitment as an off road brand that is in permanent contact with nature meant we could not turn our backs to the environment. Our work with respect to this is to ensure the production impact of our vehicles is as minimal as possible; one of our great advantages is that our entire production scheme is based on aluminum, which has a high recycling rate, greater than steel. In addition, a great deal of work has been done in which the plants at the production level have zero impact on the emissions in their environment, and we are also working on accelerating our electric vehicle program as well as hybrids. This point touches the Jaguar side because in 2018 we will launch the I-PACE in Mexico, our first fully electric vehicle. With the arrival of the I-PACE, we enter the universe of electric cars and in 2022 all our platforms will be electrified and they will be hybrid or electric. We will offer customers the option of a hybrid or electric in all our ranges in order to minimize our carbon footprint.
What are your goals for 2018?
My first goal is to increase contact with our client. We want to make sure that when we offer the universe of Jaguar Land Rover in Mexico, the client receives an offer of value identical to what he would receive in any other large market worldwide. We have to understand how those experiences evolve in Mexico, while remaining faithful to what our brands stand for. The current customer is a global client and not only local. We have to find the channels to transmit the values of our brand and let the client choose what convinces them.