Thierry Bolloré is getting the hang of coups. Caught out when he was booted out as boss of Renault nine months ago, the Frenchman staged an unexpected takeover of his own on Tuesday when he was named Jaguar Land Rover’s new broom.
The field of candidates to replace retiring Ralf Speth was crowded with luxury German car executives. An internal favourite also battled for the job. Mr Bolloré isn’t so much a left-field choice for JLR owner Tata Motors as one no one knew was in the fight.
After a decade under Mr Speth, JLR finds itself in need of an overhaul. Its costs are too high, tech too behind, and its range just plain wrong. The Covid-19 collapse in luxury car demand comes on top. Drastic measures are needed.
Cost cutting is top of the list. Mr Speth is already on his way to £5bn in planned savings. But car industry metrics are so miserable more will have to be done to simplify JLR’s range and operations. Fewer models built on fewer platforms are needed for the company to maintain margins and avoid cannibalising sales across its Jaguar Land Rover and Range Rover marques.
Then JLR needs a deep-pocketed partner to defray the cost of technology investment. JLR has a limited relationship with BMW, but Mr Speth has stayed stubbornly independent of his old employer and its rivals. After a disastrous foray into diesel, JLR is expanding its electric range. It can ill-afford isolationism when its EV offering still lags so far behind.
The suspicion is that Mr Speth, who is lingering on as JLR non-executive vice-chairman, will want to make the fixes himself — or end up being a hindrance rather than a help to Mr Bolloré. His early years at JLR were a turnround triumph as SUV sales to China soared. With that advantage lost, however, increasingly obvious internal issues such as high costs have started to tarnish his record.
That raises questions about whether Mr Bolloré has the strength to go up against Mr Speth where more is needed.
Taking his CV charitably, he has cost-cutting chops learnt from former boss Carlos Ghosn, knowledge of electric cars from Renault, and exposure to the Chinese market from his stint at auto-parts maker Faurecia. More cynically, it is his reputation as Mr Ghosn’s yes man that stands out in a career lacking luxury experience. Mr Speth may prove true to his promise to take a step back from the business. Otherwise, Mr Bolloré will have to prove that like Renault’s bosses, he too can be ruthless.
If anything, lockdown was an excuse to stop procrastinating, Oliver Ralph writes. What better time to get round to all those jobs that just seem too tedious when there are places to go and people to see?
Checking up on energy bills and comparing car insurance prices are two such tasks, but as numbers from Moneysupermarket demonstrate, people did not warm to them with equal enthusiasm.
Energy switching turned out to be pretty popular and, perhaps unsurprisingly, so was broadband comparison. Moneysupermarket’s revenues from “home services” jumped 27 per cent in the three months to June. Comparing insurance was less popular, partly because there were fewer car and home purchases. In all, it added up to a 19 per cent fall in first-half profits.
One way to make people more enthusiastic about switching is to do the hard work for them. Moneysupermarket has been investing in personalisation — monitoring what customers are paying for energy and credit cards and telling them if they are overpaying. It has also launched automated energy switching.
If it all works well, loyal customers could be merrily switching services without needing to spend hours glued to a screen trawling through the options available. That would create more dependable income for Moneysupermarket and perhaps eventually enable it to cut its hefty advertising budget. The company’s marketing spend eats up just over two-fifths of its revenue.
For the moment though, Moneysupermarket still needs to encourage customers to come through its virtual doors. The company is spending an extra £5m on ads in the second half and has recruited a fairly vicious-looking bull to take on Compare the Market’s meerkats. Sounds like an ugly — and expensive — fight.
St James’s Place customers are a loyal bunch. Its retention rate is 96 per cent, despite criticism over high fees, a place on the wrong side of the industry-wide shift to passive investment management, and until last year, links to out of favour fund manager Neil Woodford.
Growth has remained resilient. It’s a shame for boss Andrew Croft that investors in its shares aren’t so steadfast. As a play on the UK economy, the stock has struggled to shake first Brexit fears, then Corbyn concerns, and now Covid-19.
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