Brand Health Check: Land Rover

losses had hit $5.8bn (£3bn) compared with $284m
(£149m) for the same period last year.

The Premier Automotive Group (PAG), the parent of Land Rover as well as
Volvo, Aston Martin and Jaguar, did particularly badly in the quarter.
It reported a pre-tax loss of $593m (£311m), up from
$108m (£57m) the year before, due mostly to the cost of
Land Rover and Jaguar warranty repairs.

Land Rover has been dogged by quality problems and was named worst car
for long-term reliability and affordability, for the second year
running, in a recent UK What Car? poll. It also came second to bottom of
a JD Power survey for customer satisfaction. Land Rover now faces the
challenge of convincing consumers that it has left its reputation for
poor quality behind.

Political pressures on the 4x4 sector are also mounting. It has long
been targeted by green lobbyists, but such environmental concerns are
now beginning to take centre stage. Green taxes are being mooted by all
the main political parties, London Mayor Ken Livingstone wants to hit
'gas-guzzlers' with higher congestion charges and Richmond Council plans
to charge drivers of these vehicles more for parking.

However, Land Rover has hit back, launching a CO2 offset package - an
optional levy on the price of a new car, used to fund environmental
projects.

Land Rover's marketing in the UK, led by its ad agency RKCR/Y&R and
direct shop Harrison Troughton Wunderman has centred on the 'Go Beyond'
campaign, which taps into consumers' sense of adventure.

The marque has explored a number of innovative communication ideas and
scored an auto-industry first with the launch of a broadband-based TV
station.

We asked James Pool, partner and director of the Opel/Vauxhall
pan-European team at ad agency DLKW, and Ben Rachel, planning director
at Clark McKay and Walpole, which handles direct marketing for Porsche
and Peugeot, where the brand should go next.

VITAL SIGNS - UK CAR CUSTOMER SATISFACTION INDEX SURVEY SCORE



Manufacturer 2006 2005 2004 2003 2002

Lexus 873 848 878 861 860

Skoda 842 847 852 836 839

Toyota 838 835 840 848 843

BMW 820 829 836 838 838

Volvo 815 817 818 799 804

Audi 808 810 817 810 818

Industry average 791 786 797 794 791

Land Rover 762 755 756 750 744



Source JD Power and Associates

DIAGNOSIS 1 - JAMES POOL PARTNER, DLKW

From its humble beginnings as a Welsh utilitarian tractor, Land Rover
has become an iconic international brand.

It promises adventure through strong, safe, secure, beautifully designed
products, with consistently great marketing through all channels.

It is a focused brand that really knows its audience. But, real or not,
the growing perception is that its vehicles guzzle far too much gas -
particularly when idling on the school run.

Politicians are committed to taxing their way out of the green problem
by hitting 4x4 drivers' pockets, and judging by what was on show at the
recent Paris Motor Show, the Japanese are looking to offer cuddly
crossovers that provide the 4x4 shape without the eco-guilt.

Land Rover's response, the CO2 offset programme, is laudable but does
not tackle the real issue. To compound matters, Ford is refusing to rule
out a sale of Land Rover, which suggests neither the will nor the cash
is there to create products that will fuel Land Rover's spirit of
adventure in the years ahead.

REMEDY

- Keep ownership of 'adventure'. It is an emotional proposition that
will shield the brand from the worst of the criticism.

- Invest in NPD and engineering capability. Hybrids are a must; mountain
bikes might be nice.

- Find a totemic, affordable, credible green strategy. Putting an
optional tax on the cost of new Land Rovers and using it to fund
low-emission cooking stoves in India is not it.

DIAGNOSIS 2 - BEN RACHEL PLANNING DIRECTOR, CLARK, MCKAY AND WALPOLE

Land Rover's real problem is that it is part of Ford's Premier
Automotive Group, which has suffered massive losses and left Land Rover
with a rather tainted reputation.

Ford can't do luxury; putting the world on wheels is its heartland. So
the sooner Land Rover can be independent of its troubled parent, the
better.

But the brand is the jewel in PAG's bedevilled crown. It has a vibrant
product range and the Range Rover Sport is the latest must-have
bling.

The current raft of communications is putting the brand on the right
track, but it has some serious, specific challenges to address.

Its big issue is that it is bottom of the reliability and affordability
list, with a rising number of failing head gaskets and warranty repairs
needed on Freelanders.

Also, there is a common misconception that 4x4s are the worst polluters,
but this is not necessarily the case; the emissions from a 2.0l diesel
engine Freelander are 205g/km, compared with 209g/km from a 2.0l petrol
engine VW Beetle.

REMEDY

- Use PR to reinforce that Land Rover has invested heavily in improving
reliability and affordability.

- Warranty work is an enormous opportunity. Deal with problems
professionally, reliably and empathetically; it will turn would-be
detractors into advocates.

- Start pioneering alternative fuel options and shout about it.

- Find some private equity and effect a management buy-out.