Is It the End of the Road for 4x4s? IN ASSOCIATION WITH Rensburg Sheppards Investment Management A Fall in Off-Roaders Signals the Need for Manufacturers to Adapt to Survive
Byline: Alistair Houghton reports
TEETH at Land Rover must collectively clench every time its vehicles are described as "gas guzzlers". Land Rover sales in the US and UK are suffering thanks to high fuel prices, the global economic downturn and mounting environmental concerns, all of which are making people think twice about buying new cars.
In the UK, Land Rover sales were down 32.5% in May and the company now expects global sales to be flat, bringing an end to the high sales growth of recent years.
But, as Land Rover is at pains to point out, it has already invested in making its vehicles more fuelefficient.
And today's announcement of new engineering jobs at Land Rover to develop environmentally friendly technologies shows just how seriously the company is taking the need to go green.
Land Rover has confirmed that its first model to have new "stop-start" technology, which turns the engine off when the vehicle is stationary in traffic, will be the Halewood-built Freelander 2.
The innovation will save drivers at least 8% on fuel and cut down on carbon emissions.
Another innovation, unveiled with great fanfare at the Detroit Motor Show earlier this year, is the environmentally-friendly "Baby Land Rover" LRX concept car.
Unveiling the LRX last year, the company said the vehicle "demonstrates Land Rover's seriousness about continued relevance and sustainability - with new technologies, lightweight design and environmentally-responsible materials".
The test vehicle includes a diesel hybrid engine capable of running on biodiesel, which Land Rover says could reduce fuel consumption by as much as 30%, compared to other similar 4x4s.
Land Rover has not officially decided whether the compact LRX will go into production, but industry sources say that, if the project does get the green light, it will be built at Halewood. The last thing Land Rover needs in the current economic climate is a backlash against its vehicles. Figures earlier this month showed the number of new Land Rovers registered in the UK in May fell 32.55% compared to the same month last year as the economic slowdown hit hard.
This month's sales statistics from the Society of Motor Manufacturers and Traders (SMMT) also showed overall registrations of 4x4s in the UK fell by 18% last month, compared to May, 2007.
Land Rover is offsetting that decline by pushing its vehicles in other markets - but transforming its image can surely only help it to win back customers who need to economise on their fuel bills.
Even in the US, the spiritual home of the gas guzzler, rising fuel prices are making people think harder about fuel efficiency.
Last week, newspapers in Detroit, the home of the US motor industry, reported that Ford was planning to convert plants building SUVs and pick-up trucks to build cars instead, reflecting a move by US consumers towards more fuel-efficient vehicles.
Fellow motor giant GM has put the future of the Hummer brand up for review - and Land Rover's new owner, the Indian motor giant Tata, has been linked with a bid for the firm.
In Europe, many countries have introduced taxes on cars with high carbon emissions.
Land Rover's managing director Phil Popham said the trend against 4x4 vehicles has made it clear to car manufacturers that they need to adapt to survive.
He said: "It's pointing out the need to respond to environmental pressures in the area of fuel consumption. It really does support the need for investment - of the kind that we'd already started to make 18 months ago - in alternative technologies. …