Jaguar Land Rover has appointed former Renault boss Thierry Bolloré to the top job at Britain’s biggest car maker.
The move might have surprised many, with former Audi or BMW executives being perceived as potential front runners to become the new CEO.
There was also a school of thought that someone could have been promoted from within the company.
Parent company Tata Motors opted for Mr Bolloré,, who has an impressive CV, though he spent less than a year in charge of Renault.
Mr Bolloré faces a tough challenge at Jaguar Land Rover to get the company back on track following the coronavirus pandemic.
Like all car makers the crisis has hit Jaguar Land Rover hard and the company was already dealing with a host of pre-pandemic challenges.
Job cuts and a multi-billion pound cost-saving programme came about as a result of slowing sales in China and declining demand for diesel vehicles.
The company also cited Brexit uncertainty as a major issue.
BusinessLive spoke to automotive industry expert Charles Tennant about Mr Bolloré’s appointment and what he needs to do.
Mr Tennant was formerly chief engineer at Land Rover and also held senior roles at Tata Technologies and WMG at the University of Warwick.
Is the appointment of Mr Bolloré a surprise?
Charles Tennant (CT): “With the current Jaguar Land Rover CEO – Ralf Speth – retiring in September 2020 after 10 years at the helm, there has been much speculation on who would replace him, and whether it would be an internal appointment such as the current JLR head of engineering – Nick Rogers – or another German from either BMW or Audi.
“Now Tata Motors have surprisingly announced it will be a little known 57-year-old Frenchman – Thierry Bolloré – who started his career in the automotive supply chain at Michelin and Faurecia, before joining Renault in 2012 in senior manufacturing and supply chain roles.
“At Renault he was elevated to chief operating officer in February 2018 and then CEO in January 2019. Interestingly he was ousted from Renault after just nine months in the job last October.”
What does Mr Bolloré inherit and could his appointment herald a change of direction?
CT: “In Ralf Speth’s tenure JLR followed a very ambitious “dash for growth strategy” with a bulging product plan doubling production to over 600,000 vehicles per year and expanding production and engineering capacity from 16,000 employees to 40,000 in a relatively short period of time of five years.
“Some analysts observed that Speth was attempting to emulate his former company BMW in terms of scale and market coverage, and at first with annual profits of £2.5 billion it seemed possible.
“But the good times didn’t last and ambitions of a million plus sales per year were thwarted by heavy competition, a confusing and overlapping product plan of competing vehicles within the JLR portfolio, and poor quality and reliability.
“Then coronavirus decimated the automotive industry, but the problems at JLR were already brewing with a hat trick of sales decline over the past three years, and huge losses to boot.
“Now blighted by the anti-diesel brigade and collapsing sales in China, global sales have slumped to nearer 500,000 and 7,500 people have left the company.
“Now analysts have been wondering whether the company can survive in its present form and what will a big strategic review bring? Well we’re now about to find out over the next few months.”
What will Mr Bolloré’s priorities be when he takes over from Ralf Speth and what does he need to do?
CT: “For sure the in tray on his first day in the job will be bulging and I would think that Tata must believe Mr Bolloré has sufficient global operational experience, particularly in manufacturing and quality, to lead the company into a new era of innovation and productivity management.
“I am sure that Mr Bolloré will spend his first few weeks in the job carrying out his own careful assessment of the company’s strengths, weaknesses, opportunities and threats; before tearing up the current business strategy and product plan.
“He really ought to conduct a thorough product line analysis to evaluate the financial contribution of each of JLR’s 14 vehicles across the two brands currently using an excessive five platforms.
“It is well known that the Land Rover vehicles are profitable – particularly Range Rover and possibly the all new Defender – but Jaguar is probably losing money. He also will need to assess the current production capacity around the world – JLR produce in the UK/Slovakia/China/India/Brazil regions – and this may lead to some painful rationalisation and unfortunately further job losses.
“And of course above all of this there is the complicated and expensive transition to an electrified future to manage.”
Looking to the long-term what actions might he take?
CT: “Regarding future funding it is going to be imperative to seek new avenues of cash and collaborative partners – increase with BMW and/or seek further partners – to both fund and offset the huge investment burden over the next product life-cycle.
“He certainly has a huge asset in the brand strength of Land Rover but will surely have to carefully consider how to rejuvenate the Jaguar side of the business.
“The big question is which vehicles will survive a major product rationalisation, and what annual production volumes will be planned over the next few years.
BusinessLive is your home for business news from around the country – and you can stay in touch with all the latest news through our email alerts.
You can sign up to receive daily morning news bulletins from every region we cover and to weekly email bulletins covering key economic sectors from manufacturing to technology and enterprise. And we’ll send out breaking news alerts for any stories we think you can’t miss.
Visit our email preference centre to sign up to all the latest news from BusinessLive.
“With a brand new Modular Longitudinal Architecture (MLA) platform already on the drawing board at JLR he certainly has the basis of a significant platform/vehicle commonality opportunity to create his product plan from.
“And JLR have some of the best automotive engineers and facilities working out of their brand new Advanced Product Creation Centre at Gaydon, along with world class leading research at the National Automotive Innovation Centre at the University of Warwick.
“The next big thing to be announced at JLR will be the coronavirus savaged April to June results, and these will undoubtedly be a huge headache for Mr Bolloré moving forward.”