PortlandRL

A few months ago, a friend and I were talking about Land Rover not being able to meet the 35-mpg fleet average and carbon emission limits that is looming in the next six years. I did some more looking and it doesn't look good.

This is something I wrote and I'd like to know what you think.

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Land Rover embodies everything that is unique, quirky and environmentally frowned upon. Their big SUVs are immediately recognizable and the Range Rover is nothing short of an automotive icon. It is a God rolling amongst mere mortals and is the SUV all others wish they were. However, Land Rover has a white elephant in the room and for the moment, they are conveniently ignoring it. However, as 2016 and the 35 mpg fleet average approaches, the elephant is going to take up more and more space until it consumes the room.

'Land Rover' and 'fuel efficient' are two phrases not usually tied together in the same sentence unless the words 'is not' are inserted between them. During the cheap fuel spree of the 80s and 90s, Land Rover went on a sales binge and made a killing. For a while they had a corner on the luxury SUV market in the United States. But times they are a'changing. The LR2 is the most efficient model they make and even it is rated for a paltry 22 mpg on the highway. The Range Rover Supercharged is rated at a dismal 12 mpg city and 18 mpg highway and spews out some 400 grams of carbon every mile. Even with some really fuzzy math and new, fuel-efficient models, it's not looking too good.

There are two possibilities:

One: Land Rover continues to violate the CAFE standards of a 35 mpg average and pays steep subsequent fines. BMW and Mercedes-Benz have been doing this for years and they consider it a part of doing business in the States. Companies like Audi and Lexus are able to meet the current standards by cowering under their parent company figures despite selling big, gas guzzling luxury cars and SUVs. Owing to the fact that the Land Rover operation stands alone and barely teeters on profitability as is, their tolerance for steep fines is likely very slim.

Two: Land Rover's final year in the United States would be 2015 and after that, they would pack up and leave. This would not be good for its entire dealer network and would put many more out of work. Not to mention it would be the terrible loss of an iconic brand.

Emotional attachment and iconic status aside, which one sounds more plausible from a business standpoint? If Land Rover chose to suck it up and pay the fines, any money earned in sales would immediately be lost paying up for its gluttony. The operation would drop into the red ink fast and hard. Also, one has to consider the desirability of a 12-mpg cruise ship on wheels in a $6-per gallon world. Even in its home country of England, the fuel swigging Range Rover Supercharged is frowned upon as being completely pointless and out of place. And that came from Top Gear's Jeremy Clarkson, one of the biggest Range Rover fans anywhere.

The third option is one my friend and I came up with. It is that of a low sales volume CAFE exemption, likely what will be granted to manufacturers like Aston Martin, Bentley, Ferrari, and Lamborghini; proprietors of the least fuel efficient vehicles known to man.

This won't work for Land Rover, unfortunately. Land Rover is a low-volume manufacturer when compared to giants like GM, Ford, and Toyota. But they still sell around 25,000 units in this country annually. To put that in comparison, Honda sells more Accord sedans in one month than all of the Land Rover models sold in a year combined. It's low...but just not low enough to get a volume exemption.

About the only viable option for Land Rover's survival is if parent company Tata Motors continues making a killing at home in its native India. If the numbers are right, they may feel generous enough to keep Land Rover alive in the States but that will need to be seen. A lot can change between now and 2016 and when the time comes, the most crucial aspect is the numbers being right. And now, it just doesn't look like it's going to add up.

If you've always dreamed of that brand new Range Rover, place your order between now and 2015. Because after that, the classifieds are likely to be your only choice.

CocheseUGA

I could see them simply restricting sales to get under the exemption. You only ship over -1 to the limit, and that should work. Would drive up demand slightly, too.

Or it could be I don't know much about the CAFE exemptions.

vas25tl

Nicely written.

I've always loved Land Rovers but would definitely never actually own one.

Acuraluvr

iTrader: (2)

tis true. and +1 to the write up.

when hearing all these cafe standards, land rover has never come to mind. and yea, a world icon will slowly wither away.

i like LR and everything, but mostly because of the reason that they were the rebellious, expensive, model of wealth that they were. they were the off road power whose history was only matched by the legendary toyota land crusier and lexus lx470, 2 vehicles our family has owned.

i do think they will simply lower production - the us is too big of a buyer to totally cut ties. imo, they might simply just cut everything BUT the range rover.

maybe start production of a freelander hybrid to offset the range rover?

iTimmy

Good article and well thought out conclusions. I think CocheseUGA is closer to target though, it's the simplest way to not pay fines, maintain a very profitable market and restore some of the exclusivity surrounding the Range Rover brand.

Bdog

Good write-up! Land Rover being a British company has kept their British engine technology way too long and they do need to become more efficient. Maybe Tata can keep the Land Rover luxury, but become more efficient, who knows.

Land Rover used to sell the Defender in the states, then airbag requirements we made, so Land Rover dropped selling them all together as they did not want to change their design to accommodate the constant changing US regulations. I could see the original Land Rover company pulling out of the US altogether if new requirements are made, but not sure about what Tata will do if they must comply with mpg rules.

charliemike

Diesel.

Pure Adrenaline

iTrader: (2)

1. +1 Diesel
2. Once Tata brand lands stateside, LR will be rolled up under the umbrella. Tata Nano gets what, easily 40+ mpg?

Ken1997TL

They'll just pay the fines and have an entry level model that gets decent mileage to reduce the pain.

TheMirror

+2 Diesel.

Good writeup by the way. Are you a contributor to any motoring publications?

Moog-Type-S

CAFE standards FTL

Infamous425

the new LRX coming out in 2011 is suppose to have a smaller displacement (for a LR) engine with turbo. im sure they'll also do mild hybrid like the new touareg. and of course diesel and weight loss.

PortlandRL

Thanks. Unfortunately, no. I have sent some of my work to Car and Driver and never received a response.

Costco

Well written article. I could actually care less about Land Rovers and even the Range Rover Supercharged. I know all about their legendary off-road prowess and while I like going off-roading myself I don't want a vehicle that's in the shop more often than it isn't.

I wasn't sure what the best option would be for them, but after reading some posts I agree, the best thing for them would be to produce just under the CAFE limit. They'd probably go more upscale too, as I think it was mentioned.

Give me a Cayenne anyday.

btw Portland, maybe try an online-format auto publication like Autoblog or Jalopnik. I actually e-mailed the chief editor at Autoblog about what it takes to be a freelance editor, and he told me just requires a passion for automobiles and writing skills, and preferably prior experience in the automotive field. Give it a try - the editor in chief's name is John Neff.

phee

iTrader: (5)

diesel and tata will hit the states and the world will be happy. it makes my heart warm when i see what they have done with jag

PortlandRL

Thanks, dude...I'll give it a shot.

Shoofin

You think Land Rover is the only victim to the penalty?

Porsche
Bentley
Rolls Royce

Should I keep going?

They have all been getting fined for continuously violating the terms. They are trying to change things around (e.g. Porsche and it's hybrid Cayenne and upcoming hybrid Panamera, Bentley and Rolls coming out with smaller cars with smaller engines, etc).



P.S. Good writeup..

crazyasiantl

iTrader: (7)

well written article

mcflyguy24

Wow I totally thought that came from an auto mag. I hope they do find a way to survive in the states after 2016.

slobeatz

In the first paragraph you have two sentences that start with "However". I would change the third sentence in the first paragraph from:

"However, as 2016 and the 35 mpg fleet average approaches, the elephant is going to take up more and more space until it consumes the room."

To:

"As 2016, and the 35 mpg fleet average approaches, that elephant is going to take up more and more space until it consumes the room."

Just my thoughts. Good write-up otherwise.

black label

While Porsche will choose to just pay the fines, they don't really fall in the same category as Bentley and Rolls Royce.

For what they are producing and what the cars can do, Porsche's fuel economy is nothing short of phenomenal.

sho_nuff1997

iTrader: (2)

Very aggravating, they are.

PortlandRL

Thanks for the tip, man. I was actually stone-dead tired when I wrote that so I'm amazed there aren't more errors.

sho_nuff1997

iTrader: (2)

Very nice write-up. I enjoyed it.

For dramatic effect, I would add one word to the sentence that slob corrected: entire.

"As 2016 and the 35 mpg fleet average approaches, that elephant is going to take up more and more space until it consumes the entire room."

sho_nuff1997

iTrader: (2)

My apologies slobeatz. I read it as slob-eatz and not slo-beatz.