Jaguar and Land Rover sales have grown by 12 and 38 per cent respectively
Sales success has been driven by the Chinese and Asia Pacific markets, but sales are up in all major regions
JLR will continue investment in new facilities to underpin its expanding portfolio
Continued expansion has created requirements for an increased workforce
Investment in new product continues to grow at an impressive rate
Improving market conditions are accelerating revenue growth
Jaguar Land Rover is on course to generate £2.75bn in pre-tax earnings by next April, according to latest figures. As a result, the firm is on target to be the most successful company in the history of the home-grown British car industry.
The year after obtaining £500m in private bank loans in 2009, JLR had revenues of £6.53 billion. In the financial year that ended in April this year, it banked £15.78bn, a rise of 140 per cent.
Pre-tax earnings in the immediate aftermath of the credit crunch were £349m, impressive given the market circumstances. To April 2013, that leaped to £2.4bn, and it is expected to jump to £2.75bn by next April.
JLR is currently investing far more than it makes in annual profits, in order to expand its product line and pull all of its models on to three basic platforms. The majority of models will be powered by a new four-cylinder engine range. It is also investing in a joint-venture factory in China.
As of April, JLR had after-tax profits of about £1.2bn, but it is spending £5bn this year and next year on investments in new products and new factories. This intensive burst will help produce the new five-model Discovery family - which also replaces the Freelander - the new four-cylinder engine plant in Wolverhampton, Jaguar’s new aluminium platform and its new compact saloon and SUV.
JLR expects costs to be driven down. The big Range Rover and Discovery 5 model families will be built on the same aluminium platform and the Evoque and future baby Discoveries built on the same steel platform. Savings will also be made when JLR switches to its own ‘Hotfire’ petrol and diesel engines, rather than buying in units from rival car makers, as happens today.
Based on current trends, JLR could build 750,000 cars in the medium term, well up on its global sales of 357,773 last year. It is expected that the compact Jaguar saloon and SUV should add 150,000 units by 2017, and Land Rover predicts the new baby Discoveries to outperform their Freelander predecessors.
A major makeover for the Jaguar XF (which will get the new Hotfire engines) will boost Jaguar’s presence in one of the industry’s most profitable segments.