Losses mount for Jaguar Land Rover

JAGUAR Land Rover (JLR) posted a £395 million ($A700m) pre-tax loss for the quarter ended June 30, contributing to the $A779.9m loss filed by parent Tata Motors in the same period.

 

The JLR loss came off the back of a $A476.3m pre-tax profit in the fourth quarter that cushioned the company’s losses to $A634m for the full financial year.

 

However, the Q1 result represented 49.6 per more red ink than the $A467.4m JLR lost in the same period of 2018, with revenues down 2.8 per cent year-on-year to $A8.98b and a 11.6 per cent decline in global retail sales volume, to 128,615 units.

 

Light at the end of the tunnel was represented by record sales in JLR’s UK home market – up 2.8 per cent year-on-year – and a welcome volume uptick in China following 12 months of sales decline.

 

Increased demand for Jaguar’s I-Pace electric vehicle and the second-generation Range Rover Evoque helped offset weaker sales of other models in the JLR line-up, while recent facelifts of the Land Rover Discovery Sport and Jaguar XE should also help at the showroom.

 

Tata Motors CFO P.B. Balaji told Automotive News in a conference call that the Chinese market was “stabilising” and predicted “growth from here on as far as Chinese business is concerned”.

 

Uncertainty remains over how incoming British Prime Minister Boris Johnson will deliver Brexit, although JLR claims to be prepared for any outcome – including a ‘no deal’ divorce of Britain from the European Union.

 

“Should there be an event of a no deal, then that's something we should be ready for,”said Mr Balaji. “We already had it all ready for March 31, and therefore we will re-activate those plans.”

 

JLR CEO Ralf Speth said the company expected to return to profit this financial year as the fruits of its ‘Project Charge’ transformation plan started to bear fruit and singled out the all-new Land Rover Defender as a product that will help turn the business around.

 

“Despite challenging conditions in the first quarter, Jaguar Land Rover is creating a more robust and resilient business, in which we will continue to deliver a strong pipeline of products that our customers will love,” he said.

 

“Breakthrough products such as the exciting all new Land Rover Defender will pave the way for sustainable profitable growth.”

 

In a statement, JLR said its results were “consistent with the outlook for the quarter” and reflective of market conditions, as well as “additional plant shutdown time and delays in WLTP (fuel economy) certification resulting from Brexit contingency planning”.

 

“We are simplifying our business, delivering on our product strategy and adapting to the tough market environment,” said Dr Speth.

 

“We will build on our strong foundations and increased operating efficiency to return to profit this fiscal year. In this period, we expect to see the impact of growing demand for new models such as the Range Rover Evoque, Discovery Sport and Jaguar XE.”

 

Earlier this year, JLR announced it would cut around 4500 jobs globally, followed by the decision to axe the limited-run ultra-luxury Range Rover SV Coupe and hardcore off-road Land Rover Discovery SVX. The company had simultaneously been hit hard by the declining popularity of diesel engines and a market slowdown in China.

 

The all-important new Land Rover Defender is scheduled for an Australian showroom arrival in the first calendar quarter of 2020 following a global reveal later this year.