Jaguar Land Rover sees sales fall by 42%

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Jaguar Land Rover has released its latest results with sales hit hard by the coronavirus crisis.

The latest quarterly figures are for the three month period from April to the end of June.

In a period which saw several plants closed and the entire automotive industry impacted Jaguar Land Rover’s sold 74,067 vehicles – a 42% fall compared to the same period in 2019.

Losses for the period were £413m against revenues of £2.9 billion.

The car maker’s losses were not far off the 2019 figure for the period, due to the company’s Charge+ cost-saving programme actions.

Some good news for the car maker was that sales picked up through the quarter, with June sales down by 24.9% compared to 2019.

Jaguar Land Rover in Lode Lane

Another welcome aspect was that Jaguar Land Rover’s joint venture with Chery in China broke even during the period.

Jaguar Land Rover said the Covid-19 pandemic “continued to impact the business significantly” between April and June and that the UK  market was “particularly impacted”.

Sales in the UK fell by 70.1% compared to the same period in 2019.

As sales were buoyed as the period progressed Jaguar Land Rover said the recovery in China and North America was “particularly encouraging”.

Sales in China were down 2.5% for the three month period, while in North America they were up 2.2% year-on-year for the month of June.

Following the shutdown of its entire retail network, around 98% of Jaguar Land Rover’s retailers worldwide are now fully or partially open.

In addition all the company’s plants have resumed production, with the exception of the Castle Bromwich factory in Birmingham.

It is set to get up and running again on August 10.

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The £413m pre-tax loss for the period was down only £18 million year-on-year and the EBITDA margin was 3.5% with £500m of Charge+ cost actions substantially offsetting the lower sales.

Free cash flow was negative £1.5 billion including a one-time working capital outflow of £1.1 billion resulting from the plant shutdowns, which is about £500m better than previous guidance.

During the period the company successfully completed £647m of new funding and ended the quarter with liquidity of £4.7 billion, including £2.75 billion of cash and short-term investments and a £1.9 billion undrawn revolving credit facility.

Ralf Speth, Jaguar Land Rover chief executive
Ralf Speth, Jaguar Land Rover chief executive

Sir Ralf Speth, Jaguar Land Rover chief executive, who steps down next month, said: “Jaguar Land Rover has reacted with resilience and agility to the extraordinary challenges faced in the first three months of the new fiscal year, adapting rapidly to the widespread macro-economic disruption and uncertainty facing our industry.

“Through this unprecedented time, we have continued to bring outstanding new vehicles to market, electrifying our multi-award-winning range and building demand for the new Land Rover Defender, an icon reimagined for the digital age.

“As the lockdowns ease, we will emerge from the pandemic with our most advanced product line-up yet, and with the financial and operating measures in place to return to long-term sustainable profit.”

Going forward Jaguar Land Rover said sales of its new Defender have started to “ramp up” in the UK, Europe, North America, and some overseas markets.

Defender sales will begin in China and other markets from July onwards.

Other product enhancements include revised Range Rover and Range Rover Sport line-ups. Both model lines now offer special editions and a suite of upgrades, including Jaguar Land Rover’s new 3.0-litre straight six Ingenium diesel engine with mild hybrid electric vehicle technology.

Jaguar Land Rover pledged to “continue to manage costs and investment spending rigorously to maintain sufficient liquidity” for the remainder of the financial year.

It said it has upped its Charge+ target for the 2020/21 financial year from £1.5 billion to £2.5 billion.

It also said that despite the ongoing  Covid-19, uncertainty it expects a gradual increase in sales, profitability and cash flow over the year.

It said that while volumes may not recover sufficiently in the second quarter to generate a profit, cash flow is forecast to be positive.

Sir Ralf, who will take up the position of non-executive vice chairman when former Renault boss Thierry Bolloré succeeds him on September 10, added: “The fundamental strengths of Jaguar Land Rover have been tested in 2020 and we will pass this test to succeed in the future.

“Our exciting pipeline of new, advanced products places us at the forefront of our industry.

“We have a clear plan, a highly-skilled, creative team and unparalleled technical capabilities.

“I look forward to working with my successor Thierry Bolloré as Jaguar Land Rover focuses on its Destination Zero mission, and seeks to deliver the autonomous, connected, electric and shared experiences that our customers will love, for life with integrity.”


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