Stylish Jaguars Still Cost Plenty, But Quality Is Up

THE cat's out of the bag.

Or to be more precise, the Jaguar. The chromed hood ornament of a pouncing feline, known as "the Leaper," will adorn an all-new sports car this fall. It's the first new coupe from Jaguar Cars in 21 years, though unabashedly modeled after the legendary Jaguar XK-E, a car that revolutionized automotive styling when it made its debut 35 years ago.

With a price tag expected to start well over $60,000, the new XK8 sports coupe and its sibling convertible won't be a car for the masses. But its success or failure could determine the long-term viability of Jaguar, a British subsidiary of Ford Motor Company.

"In volume terms, it's not an important car," acknowledges Jaguar chairman Nick Scheele. Jaguar's still-new line of sedans, the XJ-R series, will continue to account for 80 percent of the company's worldwide volume, Mr. Scheele suggests. "But that misses the sense of what a sports car means for Jaguar. It defines for our dealers and for our customers what Jaguar is."

The XK-E helped define Jaguar as the styling trendsetter among high-line imports. And even today, studies show styling is the prime reason customers come to Jaguar. With its low-slung nose and toothy "grin," the XK8 bears an unmistakable - and purely intentional - resemblance to the nearly mythical Jaguar XK-E, a vehicle that seems nearly as fresh today as it did in 1961.

Blend of old and new styling

"It's very easy to design a car that's a pastiche [of past styling], something that's trendy and hot," Jaguar chief stylist Geoff Lawson says of the XK8. "We worked very hard to avoid that temptation. Overall, we strove to bring obvious links with the past but without copying. The heritage of good design is like DNA: It must be traceable through history but not necessarily an exact duplicate."

Indeed, Jaguar hopes not to duplicate the darker side of the XK-E mythos - its legendary reputation for breaking down.

"I've always contended Jaguar could sell as many cars as Mercedes and BMW if it didn't have the quality problem," contends marketing consultant Chris Cedergren of the Auto Pacific Group in Los Angeles.

Just five years ago, Jaguar's internal studies revealed the aging XJ-S sports car averaged more than 11 "problems" per car, many more defects than in the sporty Lexus SC-400 coupe in Toyota's luxury line.

Jaguar insiders insist quality has improved dramatically since Ford purchased the ailing British automaker for $2.5 billion back in 1989. Under Ford's guidance, the old Coventry assembly line was replaced, jobs were cut, and the remaining work force was reorganized into teams where workers could stop the line if they spotted a defect.

Body-shop hours declining

Recent internal studies reveal only 0.7 problems per vehicle. If that number is verified by independent sources, it would put Jaguar on a close par with Lexus, considered the highest-quality brand in the world.

"We've got to let the independent data speak for us," admits Scheele. The Jaguar chief doesn't deny it will take time before people start to listen. "Our image lagged reality when quality was going down. Now it's going to lag reality as quality is going up."

The increase in quality has coincided with a dramatic improvement in productivity.

"We've probably taken 40 percent of the body-shop hours out of the car," says Jim Padilla, who oversees engineering operations for both Ford and Jaguar. That's no small feat. It adds up to a savings of several thousand dollars per vehicle.

Considering the small volume targets for the new XK-8 - about 7,000 during the first year - that won't have much of an impact on the company's bottom line. But it sets the stage for bigger things to come near the end of the decade.

What could be the most significant car in Jaguar's history is code-named X-200. It's an "entry level" luxury sedan, with a price on par with the Mercedes-Benz C-Class. Using a basic platform shared with Ford (which uses the code-name DEW98 for its version) the X-200 is designed to transform Jaguar into a relatively high-volume manufacturer, at least by historic terms. The goal is to sell 55,000 a year starting in 1999. That would boost overall Jaguar sales to 85,000 to 100,000 annually.

"The customers Jaguar will try to win over with the X200 are already buying 'bullet proof' Japanese luxury cars," Mr. Cedergren says. "That's why it's essential Jaguar rebuild its reputation for quality and reliability with the XK-8 before the new car debuts in 1999."