Jaguar cuts 2016 prices to hit luxury sweet spot

Jaguar announced Thursday that it is cutting list prices in a bid to hit harder at the core of the luxury market, an unusual move in a snooty upscale market that risks the brand's air of exclusivity.

“Our pricing has consistently been at the top of the luxury segment,” says Rob Filipovic, head of product planning for the Jaguar Land Rover in the U.S. “We no longer want to be a high-priced outlier in the luxury market.”

As a result, the 2016 Jaguar XF 35t midsize sedan with a V-6 engine will be based priced at $52,885, including shipping, down 9% over the lowest-priced 2015 model.

The 2016 XJ flagship sedan will start at $75,395 with what Jaguar says is $7,000 more in goodies — standard ventilated seats, a fancier sound system, LED headlights with automatic high beams and more.

The move comes as Jaguar introduces two lower-priced models that it believes together could make up as much of half of its coming sales. The entry-level compact XE sedan and F-Pace SUV both are aimed at bringing newer, younger buyers to the storied British brand. They expand the lineup to five models.

The new XE will start at $35,885, which Jaguar says will put it in the heart of the market. No pricing has been announced on the F-Pace.

But in cutting prices, Jaguar has to make sure it is not seen as watering down its image as an elite brand — the transport of choice for British royalty and rock stars — in a crowded luxury marketplace.

Jaguar, which traditionally has sold cars instead of trucks, has suffered in a market where buyers have turned in droves toward SUVs. It sold 10,221 cars through the first eight months of the year, down 4.4% from the same period last year, Autodata reports. By contrast, companion brand Land Rover, which markets only SUVs, sold 42,548, up 20.%.

The new F-Pace, making its formal debut this month at the Frankfurt Motor Show in Germany, will give Jaguar a foothold in the crossover market, but it's yet to be seen whether it simply takes away sales that might otherwise have gone to Land Rover.

A price cut, of course, is always considered a surefire way to boost sales. But it's not as easy as it sounds. Hinting at the balancing act that it faces, Jaguar says the new pricing strategy is aimed at it being "a more attainable luxury brand while maintaining an elevated position among premium makes."

Jaguar officials say they felt their pricing overall was above the sweet spots in the luxury realm. They are now unabashed in their desire to increase market share in the U.S.

"The Jaguar brand is on the eve of a major transformation that will see it dramatically increase its presence in the United States luxury marketplace with an expanded lineup," says Joe Eberhardt, CEO of Jaguar Land Rover North America.

In addition to the price cuts, Jaguar is enhancing its warranty to five years or 60,000 miles from four years/50,000 miles and offering free scheduled maintenance.