Firm records pre-tax annual losses of £3.6 billion – but says revival programme is on track

Jaguar Land Rover has recorded an annual loss of £3.6 billion, but chief executive Ralf Speth says an ongoing cost-saving programme will transform it into a “leaner and fitter” company for the future.

The pre-tax loss for the financial year that ended in March reflected a £3.1 billion write-down of the value of the business in the final quarter of last year, but also showed the ongoing impact of falling sales in China and continued uncertainty over Brexit. The firm’s annual revenue of £24.2 billion was down £1.2 billion year on year.

Without the one-off write-down, Jaguar Land Rover's annual pre-tax loss was £358 million. While annnual sales increased by 8.4% in the UK and 8.1% in North America, the sharp decline in China meant that its overall sales of 578,915 vehicles was a year-on-year decline of 5.8%.

Jaguar Land Rover did post a £269 million pre-tax profit in the final quarter of the financial year covering January-March 2019, although this was reduced to £120 million after redundancy costs, part of its ongoing transformation programme, were taken into account. The firm noted that it retained £3.8 billion of cash.

Speth said that restructuring programme has already resulted in £1.25 billion of efficiencies, and made the firm “one of the first companies in its sector to address the multiple headwinds simultaneously sweeping the automotive industry”.

He added: “We are taking concerted action to reduce complexity and to transform our business through cost and cash flow improvements.

“Jaguar Land Rover is focused on the future as we overcome the structural and cyclical issues that impacted our results in the past financial year. We will go forward as a transformed company that is leaner and fitter, building on the sustained investment of recent years in new products and the autonomous, connected, electric and shared technologies that will drive future demand.”

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The financial results come amid ongoing speculation that Jaguar Land Rover's owners, Tata Motors, are considering selling the firm to the PSA Group.

In a conference call, Tata's financial chief, PB Balaji, again denied it was considering selling Jaguar Land Rover, telling reporters "there is no truth to these rumours. We do not comment on speculation."

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Analysis: why Jaguar Land Rover faces tough times (from March 2019)

Jaguar Land Rover boss plays down PSA sale report - but doesn't deny it

Analysis: why Jaguar Land Rover lost £3.4bn (from Februrary 2019)

Opinion: can the new Defender help turn around Jaguar Land Rover?

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Comments
33

20 May 2019

It's notable to work out the loss per vehicle sold - somewhere in the region of £5,900 depending on the stats used - although the writedown obviously is the major chunk.

JLR needs to get itself some positive publicity or else buyers will shy away thinking it has become a toxic brand with possibly poor residual values. How's about matching the Korean brands (and MG?) on warranties given?

20 May 2019

It's the Chinese market that has fallen by half, which is where they need to focus.

21 May 2019

If they were to offer more than 3 years warranty, they would go bankrupt at 5x the pace lol

20 May 2019

The article does not mention which part of JLR (Jag or LR) contributes to the heavy losses, or which models within each marque.

I suspect XE & XF, saloons going out of fashion, and an interior that does not reflect its premium pricing.

20 May 2019

It's all down to China. Other regions are doing fine. Clearly they have a problem with customer confidence there. People say their quality is poor but I don't belive that it's much different to the German makes. The problem is that expensive cars are so complex and therefore go wrong. If you have a really solid distribution & service channel, you can live with that. I think that JLR need to work on that in China as well as reliability. To be honest, their UK dealers struggle to fix complex problems first time, so I hate to think what goes on in China.

20 May 2019
abkq wrote:

The article does not mention which part of JLR (Jag or LR) contributes to the heavy losses, or which models within each marque.

I suspect XE & XF, saloons going out of fashion, and an interior that does not reflect its premium pricing.

 

It is indeed the XE and XF (although no Jaguar is doing brilliantly).

Apparently JLR was chasing volume that never materialised... but if so, why did they hike the prices so much in their home market? I’m sure a lot of prospective buyers were put off by the very punchy pricing, especially when the big 3 Germans are so aggressive on lease costs.

Some very disjointed strategy at JLR in recent years.

 

20 May 2019
abkq wrote:

The article does not mention which part of JLR (Jag or LR) contributes to the heavy losses, or which models within each marque.

I suspect XE & XF, saloons going out of fashion, and an interior that does not reflect its premium pricing.

 

No firm with hopes of rising again and surviving is going to tell the world exactly where and why it is not doing well. Comes under the heading of commercial confidentiality, heard of it?. As for you suspecting etc...that point has been widely made months ago. What paragon of motoring virtue do you own?.

20 May 2019

JLR will be sold off, because it needs MASSIVE investment.  Tata won't (cannot) finance that!  It will also have to bring forward the release of the Defender - again, said that before, as it will need to impress a buyer (or the buyer will insist on it).  JLR is the architect of its own misfortune.  It has rotten and inept management that haven't a clue what they're doing.  Even the new Defender will be hugely over-priced because they've gone too upmarket yet again.  It should be a hose-out 4x4 with conventional suspension (a bit like Ineos are doing).  But it won't be, as everyone knows.  It will be air suspension and simply a rougher (looking) Evoque.  Mistake number...what?  Too many now to count.  As I said, JLR doesn't know what it's doing.  And that's why they have themselves in a mess.  It all went down after launching the Evoque, and even then they had Posh Spice involved, which was a marketing mistake.  They then replaced the Disco with a 'sportier' look rather than boxy (despite how well received the Disco 4 was), got rid of the Freelander, when they should have built a Mokka-sized 4x4, then topped it all with failing to replace the aging Defender at an appropriate time, and finally with a posh version - which is no good.  It wouldn't surprise me if they used Posh Spice again when the new Defender finally breaks cover.  But perhaps they would do better to use Jimmy Carr, Peter kay, and Lee Evans - they're top comedians, too.

20 May 2019

It all went down after launching the Evoque - yeah, what a disaster the Evoque has been :-)

I'm not surprised you don't wait to read the comments after you've posted. 

20 May 2019

Hugh, why are you such a complete arse?  Why do you ALWAYS make yourself look such a gimp?  He quite clearly means AFTER the Evoque, he even says that.  You are such a prick.

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