Jaguar Land Rover agrees £560m loan with Chinese banks

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Jaguar Land Rover has borrowed 5 billion yuan (£560m) from Chinese banks.

The Midland car maker has entered into agreements with five lenders for the unsecured three-year term loan facility.

The five banks are Bank of China, ICBC, China Construction Bank, Bank of Communications and Shanghai Pudong Development Bank.

Speaking on Friday (June 5) Arthur Yu, Jaguar Land Rover’s China chief financial officer, said the loan “can help Jaguar Land Rover China better manage cash flow amid the coronavirus epidemic”.

The latest move comes after reports the car maker is in talks with the UK Government to secure a loan of more than £1 billion.

There has been further speculation that the Government could take a stake in Jaguar Land Rover but it has been suggested that the company’s owners Tata are not keen on the prospect.

The company has said its sales in China in April were level with same period last year, and that sales were up in May.

Mr Yu said the company expects luxury car sales in China will be level with last year or could see slight growth.

Jaguar Land Rover is involved in a joint venture in China with Chinese car maker Chery Automobile.

Both Land Rover and Jaguar models are produced at a factory in the Chinese city of Changshu, near Shanghai.

The factory closed earlier in the year due to the coronavirus pandemic but resumed production towards the end of February, before the UK lockdown.

The Chinese market will be a crucial one as Jaguar Land Rover seeks to restore its fortunes.

The company has said its sales in China in April were level with same period last year, and that sales were up in May.

Mr Yu said the company expects luxury car sales in China will be level with last year or could see slight growth.

 

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The UK car industry continues to be hard hit by the coronavirus pandemic and recent days have seen big job cuts in the industry.

More than 4,000 jobs are set to be axed by Aston Martin, Bentley, McLaren and the Lookers car dealership.

Meanwhile Nissan announced a vote of confidence in the UK’s automotive sector when it said it would be keeping its Sunderland plant open but closing its factory in Barcelona.


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