Kevin Dause approached his 50th birthday with an important item on his to-do list: Ditch the minivan and get a luxury sport-utility vehicle.
The vice president of an insurance consulting firm in Schaumburg, Ill., stopped at a Volvo dealership, then priced two Porsche SUVs and later perused Land Rover’s website. None had a vehicle that appealed to him, and the brand that did, caught him by surprise.
“I wasn’t looking for a Jag,” Mr. Dause said in an interview shortly after taking delivery of a Jaguar F-Pace painted British racing green. He initially expected to wait nearly five months after ordering the hotly anticipated crossover SUV, but the vehicle showed up about a month early.
Tata Motors Ltd. -owned Jaguar is well regarded for pricey luxury sedans and sexy roadsters, but hasn’t been known as a fast-footed car company. Jaguar is one of the last luxury brands to jump on the SUV craze. Its transformation comes as the brand’s sticker prices are falling, a trend widely employed by premium car makers looking to lure a broader range of customers while interest rates are low and light-vehicle demand is running at a record pace.
Since buying Jaguar and Land Rover from Ford Motor Co. in 2008 for $2.3 billion, Tata has spent billions of dollars updating the two brands to better compete against German and Japanese luxury car makers. Land Rover last year was the fastest-growing brand in the U.S. amid a wider boom in demand for bigger vehicles, and Jaguar is becoming more relevant to a bigger swath of buyers.
When Tata bought Jaguar eight years ago, there were already 18 luxury crossover SUVs on the market and only three brands—Volvo, Porsche and Toyota Motor Corp. ’s Lexus—counted one of those models as the highest-volume product. A crossover SUV is typically based on car architecture, such as a sedan, but built with bigger proportions and higher off the ground.
Today, there are 35 luxury crossover SUVs and the segment’s share of total U.S. light-vehicle sales has nearly doubled compared with 2008, to 5.2%. Eight brands now claim a crossover SUV as their top seller.
Jaguar Cleveland President Jeffrey Davis, who unveiled the F-Pace to a crowd of prospective buyers last week, said dealers have asked the brand’s owners to deliver an SUV capable of battling BMW AG’s X5, or Porsche AG’s Cayenne. Those crossover SUVs changed the profile of German brands known for their cars—and helped spark wider interest in the segment.
Jacki Whitlow, who attended Mr. Davis’s launch party, stepped out of a silver F-Pace in the Cleveland showroom and said she plans to trade in her Lincoln MKX sport utility for the new Jag. Her husband recently bought an electric BMW sports car from another dealership that Mr. Davis owns.
Other dealers say Jaguar needed to bring out a premium crossover SUV.
‘This is the heart of the market.’
—Jack Weidinger, Jaguar dealer
“This is the heart of the market,” said Jack Weidinger, president of Jaguar of Great Neck on New York’s Long Island, which has been selling the brand since 1938. In 2003, he was among a group of dealers pressing Jaguar’s then owner Ford to catch up with market trends and consider bringing out an SUV to help a brand that then was a perpetual money loser.
On Monday, Mumbai-based Tata Motors reported earnings for its fiscal fourth quarter ended March 31 tripled due to strong results at its Jaguar Land Rover business. One reason: the Jaguar XE, a new aluminum-bodied luxury sedan priced to compete with Cadillac, Lincoln and Lexus products. The entry-level car has been attracting new buyers to the brand, say dealers. Shares of India’s largest auto maker rose 12% to $33.50 in 4 p.m. EDT trading on the NYSE.
The F-Pace, a five-passenger midsize vehicle priced between $40,000 and $70,000, offers a second way to cash in on SUV demand, in addition to Land Rover.
Volkswagen AG ’s Bentley unit is getting into the SUV market with the Bentayga, an about $253,000 off-roader hitting the market as General Motors Co. ’s Cadillac, Volvo Car Corp., Audi AG and Lincoln all update their SUV offerings.
On Wednesday, Jaguar is expected to report that its May dealership traffic in the U.S. hit the highest level for a single-month since 2008, and say the F-Pace is sold out through July, a spokesman said. About 9,500 people hit Jaguar showrooms in May, compared with 3,800 in the same month a year ago.