Holding on to a Hero

By City Rover

It is a truth universally acknowledged, that a single man in possession of a good fortune, must be in want of a wife car.

I dare say when Jane Austen sat down to begin her second novel in 1813, she could not have imagined a) that it was destined to become one of the most famous first lines in literary history, b) that two hundred years later it would come across as a bit, um, sexist, and c) that horseless carriages might be considered preferable to thankless marriages^[1].

We have explored, in previous episodes, the choices that the FX market ‘professional’ might make when it comes to satisfying their want for wheels. Many is the spot trader who will gravitate towards the brash, shoutier end of the market; options traders prefer a rather parsimonious choice given the PTSD of a decade or more of theta bills, whilst the salesperson feels the siren call of the patrician end of the market.

To this we should now add the FX quant, although usually found on a bicycle made of unobtanium rather than powered by internal combustion; and finally the FX e-commerce trader, often with a need to prove a point, so s/he will have a purchased a Ferrari if things have gone well, and leased one if they haven’t.

Yours. For a mere £180k

But, as life marches on – and children, dogs and hobbies arrive – one-by-one we all end up with an SUV. In the same way you cannot blame a duck for quacking, you can’t blame the spot dealer for choosing the V8 AMG Mercedes G-wagon. Sloe-black, triple black, ‘murdered-out’, it’s a genuine surprise when it doesn’t arrive from the factory with 2kg of crystal meth in the boot.

And whilst the option trader will be happy with his Nissan Kumquat, far and away the most popular SUV of all time is the Range Rover. You will find a 1:1 ratio of Solihull’s finest to all other cars combined in most Canary Wharf car parks, and they outnumber any other luxury car on the roads of the UK. All this despite the price tag topping out at £180k, and that’s before you ask Land Rover to paint it in the same shade of blue as your husky’s eyes.

Land Rover have mostly been clever around the positioning: new money buys the Range Rover Sport, old money orders the Vogue, and the Velar & Evoque for people who live in Wilmslow. The top of the range is now in its fifth generation, a true hero car, a triumph of minimalist design, an interior that is quieter than space itself, every surface covered in leather made from unicorn foals. Sure, like Editor Lamborghini, it may have expanded its waistline a touch over the years [harsh but fair – Ed], but rear wheel steering ensures even the most European of Finance Bros, in their Patagonia branded Fulham life-jackets, can still squeeze it into the last parking space between the orange Veyrons on Curzon Street.

A Range Rover is a uniform, it will fit in everywhere. From Claridges to the Cotswolds, it affords the owner a bird’s-eye view of the proletariat, a walnut veneer of breeding, a perception of having attended the ‘right’ school and summers in Paris, rather than merely having traded Mark-Paris. And this is not just a UK phenomenon, the Range Rover is revered across the world, from LA to Lagos, from Moscow to Mogadishu.

However, it is this latter fact that is causing rather some bother, for Range Rover owners, up and down the country, are being relieved of their pride and joy at an alarming rate. It appears that it is no more troublesome to unlock somebody else’s Range Rover than it is to unlock your iPhone. The statistics are horrifying: of the top 10 most stolen cars in the UK, the different flavours of Range Rover take the top six spots. Every month this year, a staggering 1,000 Range Rovers vanish from driveways and streets, with London and Manchester as the two worst theft locations.

“And if you want some, get some, bad enough, take some” (Snoop Dogg)

“Theft of our vehicles in large cities has become a problem,” said Adrian Mardell, JLR’s new CEO, who is clearly a master of understatement.

I wonder though, is it not tempting to be a bit cynical about this? For every Range Rover that comes out of a shipping container in a location somewhat beyond the official scope of a Jaguar Land Rover franchise^[2], a spanking new one is ordered, courtesy of Direct Line.^[3] It feels like a good business model for Jaguar Land Rover (JLR), especially if you have saturated the luxury market in your home territory. Clearly, not so much for Direct Line.

Sir, your new Range Rover has arrived

And as car insurance is simply a business like any other, which is to say one that needs to make profits for its shareholders, the predictable outcome is that insurers are now simply refusing to insure these vehicles. They began by increasing premiums – the UK media has been full of people being asked to pay insurance premiums of £11,000 for their new pride and joy – but, as the thefts continued, they have now simply stopped offering to insure them full stop. You simply cannot insure a Range Rover if you live within the M25 unless it is part of a ‘multi-car’ policy, and even then, you will need pockets deeper than a wizard’s sleeve.

So, what are JLR doing about this? Very little as far as I can see. CEO Mardell states that the problem is under control: “There’s a lot of work to do” he said, again, stating the blindingly obvious. The work our man refers to is seemingly centred around replacement of the car’s ‘body control module’ (which oversees security), upgrading the (not very) Smart Key, and updating the ‘In Control’ app. According to Mardell, as a result “the theft of those vehicles is significantly lower” ^[4]

Hmm, not so significantly lower to prevent Land Rover, earlier in the summer, from actually withdrawing their own insurance products on their own vehicles: “theft incidents had become so prevalent that JLR was forced to halt its own offering last year”⁴.  I am staggered that they haven’t yet rectified this, as surely this is the only way to keep selling their cars, and their refusal to do so quickly, is hardly a vote of confidence in their own security methods.

So to recap. You have decided that you can’t afford, or indeed can’t find, insurance for your £180k pride and joy. You tell yourself it will simply have to go, whether or not you want to pretend to be the 4^th Earl of Fotheringham at the next Savoy dinner or FIASCO shoot.

And thus, Dear Reader, we come cantering towards the final insult.

How to quantify what is coming at you when you try and sell your Rangie? Forget EUR/CHF on 15 January 2015. This is going to be a much longer, grinding and more painful move. Think AUD/JPY in the second half of 2008, a 45% linear ‘risk off’ move lower that will play out over six months.

Even with the intervention of JLR offering to insure these cars themselves, which again they must, the prices will, at best, recover half of the move. Values are already cratering, almost as fast as new orders are being cancelled. Dealers are overflowing with inventory, and they do not want another one, thank you anyway.

After a year of reading City Rover, you will be rightly be expecting some sage consumer advice to come forth. Sorry, but I am afraid there is no lubricating this one; you will simply have to touch your toes and yes, it is going to hurt.

In the UK we have online companies that act as buyers of last resort; these people are now your best friends, so see if they really will buy any car. Like all good traders, we know the only way to deal with an out-trade is nine grammes of lead between the eyes.

But, do not be too despondent, there is one thought that should give you a lift as you walk into the Hyundai showroom to replace your pride and joy.

You see, the one thing you do not want to do as a Range Rover owner, and I mean never ever, is stray too far from an authorised Land Rover service centre. These vehicles may be magnificent, but they are made in the Midlands by Brummies, and that was never much of a byword for quality. You don’t so much buy a Range Rover as enjoy a timeshare with the dealer. That is fine if you live within the M25, surrounded by folks that can constantly fettle your pride and joy under warranty. Much much less so if you have bought it out of the back of a shipping container in Kampala.

Starting it with an iPhone won’t help you if it won’t start at all….

A Range Rover, in its natural habitat

[1] Note to Mrs. City Rover, this is no reflection on our marriage, it just kind of rhymed nicely…

[2] https://observer.ug/news/headlines/71723-uganda-haven-for-stolen-cars

[3] Other insurance companies are available

[4] https://www.autocar.co.uk/car-news/new-cars/jlr-boss-high-range-rover-theft-rate-has-become-proble