Transcript
Gerry McGovern
Good morning, everybody. Great design is the gateway to customer desirability. For me, it’s about making that emotional connection. I mean, I would say that, wouldn’t I? I’m a designer. But I truly believe that and at Jaguar Land Rover we are very much a design-centric country – company. Jony Ive was asked earlier about where design sits in the business in terms of reporting structure. Both Ian and I sit on the executive board and report directly to our CEO. That’s how seriously we take design but it hasn’t always been that case, particularly with Land Rover when you look at its history. I mean, Land Rovers, to a certain degree, look the way they do because of what they do. They were all about form follows function. They were made in a certain way with the materials that were available at that time.
But things have changed, although it’s taken time. Maybe 20 years ago, Ian and I would have been called flower-arrangers and our opposing numbers in engineering would have been called members of the Flat Earth Society but that’s changed too. When we look at our current range of vehicles, they’re all individual, they’re all unique. Capability is at the core of them and design plays a key role. The design elements have evolved over a long period of time and one of the things that we’ve been doing is saying, how relevant are these design elements in a world that is changing? It’s changing very dramatically, as you know.
Customer expectations are changing, technology itself is changing and certainly the environment is and also luxury, the notion of luxury. We are a luxury brand so it’s important that we look forward, we remain flexible to maintain that relevance. And we’re also recognising some significant shifts when we look at social media, for one, the incredible impact social media is having.
When we look at luxury itself, the fact that we sell in 176 countries and the notion of luxury, say for example, in China, which is becoming one of our biggest markets, is quite different to the view of what luxury should be in America and that’s quite different to what it’s considered to be in Europe. So how do we design for that? That’s an important question for us.
And then when you look at demographics and you look at the shifts, you’re seeing some significant moves there from younger to older in the established markets but probably more importantly, in the emerging markets, it’s the other way round. It’s from older to younger.
We’ve developed a strategy and no, when you look at that, we’re not going to be designing ladies shoes, but when I talk about Christian le Bouton and desirability in the same sentence, I think most ladies here would understand what I’m talking about. But it’s based on four key elements; a relevant approach to functionality. Range Rovers, Land Rovers have always been known for their functionality but what’s going to be relevant in a future context?
Sustainability; you know, Ralph mentioned the silver bullet. In terms of technologies, we will develop technologies that are appropriate for us as a brand, that helps us maintain what we’re about. Our vehicles will get lighter. Aerodynamics is far more important than they’ve ever been before for us.
And then desirability itself; I’ll come to that in a moment.
But then when we consider luxury – and as I say, we are luxury brands – we’ve recognised that we are making a significant shift. We’re on a journey. We’re not just designing four-by-four vehicles any more. We’re actually designing luxury products and we’re competing with other luxury manufacturers, not just automotive but other luxury goods and services because the very people that are buying those things are buying our products and they’re continually cross-referencing. So the bar is going up all the time and that’s been quite difficult for us, as a culture, to sort of comprehend in order to move our business on but we’ve started to do that. That’s strategy.
Although I only just touched the surface, already we’ve started to allude to that quite strongly with our ten-model-year vehicles which we introduced two years ago now. And these vehicles have actually transformed our business. These are at the base of our sales success at the moment and those, these vehicles do represent a significant shift.
Having said that, it will take a whole new generation of products to get to where we ultimately want to be and the first of that new generation of products will be the Evoque, which will transform our business. The Evoque started life as this concept vehicle which is the first manifestation, if you like, of that strategy. We actually called it White Space at the time and for us, that was about looking at the market and seeing what the opportunities were in that market, creating something that didn’t exist. Nothing exists like the Evoque.
We revealed that at the Detroit show a number of years ago now and the reaction to it was fantastic. I was asked by the press, is there any reason why you wouldn’t build it? And I said, yes, stupidity. So we did make the decision, quite rightly, and we were supported by Tata Group on that and we have put it into production.
And I suppose – you see them both here, the coupe version and the five-door version. They’re really a tribute to the designers and engineers that have taken that concept and turned it into a production reality because actually, it’s not that easy to do that. You see concept cars at shows, they look great and then you see the real, the finished thing and they’ve changed completely.
And this has fundamentally taken a culture shift in our business, recognising that it’s about giving customers what they want, not what we’re capable, as a business, of giving them, creating truly desirable products, even if it just puts a smile on their face. Design doesn’t have to be justified through incredible technology or innovation. Design in itself is something that can create that emotional impact and can bring enjoyment to people’s lives and there’s nothing wrong with that. It doesn’t have to be worthy. Clearly, it needs to be supported by the right levels of technology and we have to have the right processes in place and we need to build to the right qualities, etc.
And innovation is truly important to us but innovation that is focused on customer delight as opposed to innovation just for the sake of it. Part of our remit also is to have a say as a sort of creative office role, if you like, in terms of the connection between the product and the way we communicate it. That’s something that traditionally, in an automotive business, hasn’t happened before. It’s really important that we get continuity through all visual communications, whether it’s our showrooms, our motor show stands, our brochures, our advertising, whatever.
There needs to be a consistent approach to that and Apple do do that very well. We recognise, with the Evoque, it’s a vehicle that we’ve never done before and as a consequence, it will be a different group of customers; younger, more urban-oriented. So we’ve realised we’re going to have to talk to them in a different way and that’s what we have been doing through this pulse in the city campaign and design has been at the very heart of that. Part of it was, we introduced the vehicle about a year ago now at Kensington Palace, which celebrated 40 years of Range Rover and it was the first production vehicle we showed.
And the interest in it was so incredible that we got something like 2.5 million hits on the internet within a few days of that going out on YouTube. This is all clearly about generating growth as well for our business; 100,000 registered interest in, serious interest in the car and something, at the moment, like 11,000 orders. Now, you might think, by Apple standards, iPhone standards, that’s not very many but 11,000 – we’re talking about vehicles here and it’s relatively unheard-of for people to put deposits on vehicles before they’ve even seen them, let alone drive them so that’s quite unique.
And what’s it going to mean in terms of the economy? 1,500 new jobs up at Halewood where we’re going to build this vehicle, two billion for our UK supplier chain and Ralph mentioned the investment. I mean, just in product development alone and all the other relevant disciplines within our business, because remember, design can’t work in a vacuum. It’s a multidiscipline task to take something from concept to production and we’re hiring a lot of people.
And that’s relative to our desire to really grow these brands. We’re being very bullish about our future and design is right at the base of it. And for me, it is about creating a compelling vision. As I say, design is centric to us. We come from a country where design, we have a rich design heritage but if I’m being slightly provocative here, I’d suggest that we don’t necessarily recognise it. You know, what has happened to, you know, British, great British design? It’s there but I don’t think we necessarily promote ourselves in the right way.
Anyway, I won’t be any more provocative. I was very quick there. How many minutes was I? Nine minutes, not bad. Over to Ian.