Currently reading: Jaguar Land Rover records £422m loss in last financial year
Positive 2019 offset by disastrous first quarter of 2020 due to pandemic; 1100 contract agency employees to go
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3 mins read
15 June 2020

Jaguar Land Rover (JLR) has posted a £422 million loss for its financial year ending 31 March, with last year’s return to profit offset by the massive slump in demand during the coronavirus pandemic.

The impact of the crisis and associated shutdowns led to JLR retail sales falling nearly 31% year-on-year between January and March, down to 109,869 units. It meant full financial year sales were down 12.1% over the 2018-19 period.

The fall in demand made revenue fall dramatically, offsetting positive figures in the second half of 2019 that returned the company to profitability under its Project Charge transformation programme.

JLR has now increased its cost-cutting plans and will make 1100 agency staff redundant. 

With Covid-19 making a substantial impact in the Chinese market from January and continuing to restrict sales in Europe, it made a pre-tax loss of £501m in the first quarter of 2020. That offset early profits to result in a £422m full-year loss on revenue of £23 billion.

JLR chief executive Sir Ralf Speth said: “Jaguar Land Rover’s early action to transform its business meant that, as a company, we were on track to meet our full-year expectations and operational and financial targets before the pandemic hit in the fourth quarter.

“We also reacted quickly to the disruption caused by Covid-19. Our immediate priority has been the health and wellbeing of our people – and this remains the case as we have now begun the gradual, safe restart of our operations.”

JLR lists strong positives despite the gloom outlook, having just missed out on breaking even on its earnings before interest and taxes (EBIT). It also boasts "solid liquidity" of £5.6bn, including £3,7bn cash and a £1.9bn undrawn revolving credit facility.

Product successes include the Range Rover Evoque, of which sales rose by 24.7% year-on-year, and the Jaguar I-Pace, of which sales increased by 40%. The revised Land Rover Discovery Sport was launched in China in March and may prove popular there. Chinese sales of the Range Rover and Range Rover Sport are described as "particularly encouraging".

Globally, demand for JLR products was down 62.5% year-on-year in April and 43.3% in May. However, a recovery is expected, because 89% of JLR's global retailers are now fully or partially open, while plants in Solihull, Halewood, Slovakia and Austria have restarted production.

Castle Bromwich, which produces Jaguar saloons and the F-Type sports car, won't resume until mid-August, however, with the factory being fitted out to produce the all-new, electric-only Jaguar XJ.

JLR's Project Charge cost-reduction plan is still making headway, with saving increasing by £600m in the first quarter of 2020 to £3.5bn. It will reduce investment spending and has been "deferring or delaying lower-margin and non-critical investment", intending to increase cost savings by a further £1bn over the £4bn previously announced as part of Project Charge.

It admits it has to reduce the number of contract-agency employees in its factories "over the coming months" by around 1100.

READ MORE

How Jaguar Land Rover is adapting to the coronavirus crisis 

Jaguar Land Rover targets more savings as profits rise 

The future of Jaguar Land Rover, according to CEO Ralf Speth 

Jaguar Land Rover in talks with BYD for battery supply

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Comments
13

15 June 2020
COVID issue aside, the management of this company is a complete clusterfxxk. Project whatever it's called isn't going to do anything other tell them that their product line up and platform strategy is a complete mess.

15 June 2020

Sadly, I can't see the long term future for JLR as it is now. I think it will end up broken up as was the case with Rover and I fear Jaguar will be the casualty.

15 June 2020

The shutdown started on the 15th March... JLR lost 31% of annual sales in 1/2 a month? I think not.

JLR's continued failure is STILL down to management failings.

The Covid-19 Crisis just comes as a catastrophically bad time for JLR, so much so they thought keeping Mr Speth on might be useful! Highly humorous.

The ongoing job losses will, fingers crossed, flush out some of those at the top - and fresh growth can begin anew once this all blows over (in a year or so).

15 June 2020
CarNut170 wrote:

The shutdown started on the 15th March... JLR lost 31% of annual sales in 1/2 a month? I think not.

JLR's continued failure is STILL down to management failings.

The Covid-19 Crisis just comes as a catastrophically bad time for JLR, so much so they thought keeping Mr Speth on might be useful! Highly humorous.

The ongoing job losses will, fingers crossed, flush out some of those at the top - and fresh growth can begin anew once this all blows over (in a year or so).

Their slow down started much earlier in February as the Chinese market went into lockdown and as we all know they are very dependent on the Chinese market - anyhow the April to June quarter is going to be a blood bath

 

15 June 2020
JLR always has something to blame, whether that be the drop in diesel sales due to dieselgate, the ever changing emissions targets, covid, etc.
The management will blame anything before admitting they were in the wrong on decisions they made.

15 June 2020

Very confusing reports about JLR finances. JLR state they have 3.7 billion pounds in cash plus access to another 1.9 billion of  undrawn credit. They were told by the BoE recently that they didn't qualify for government loans because of their credit rating. JLR then borrow unsecured over 550 million pounds from Chinese banks to ease operations in China. Recently it was reported that JLR was burning around 1 billion pounds a month in the U.K. 

The 3.7 billion figure mentioned above was reported by AUTOCAR to be available some months ago. 

Can  someone please make sense of these report's because I can't.  

15 June 2020

JLR are on a slow burn out now where demand is not going to pick up and they're going to burn through cash at an alarming rate - I just don't see this ending well 

15 June 2020
Carnut170, the drop of 31% is January to March 2020 vs January to March 2019 not a 31% drop for the whole year.

15 June 2020
Thankfully, after January 1st 2021 the taxpayer will be able to rescue this failing Indian company. Freedom at last!

15 June 2020

TATA JLR are losing money because the British management are incompetent and couldn't manage a p*ss up in a brewery.

The following is the biggest problems with JLR right now.

Land rover side are doing ok but they need to STOP the chinese ripping off their designs and selling knockoffs (one example is the landwind x7 which is a direct copy of the LR Discovery Sport )which depresses sales of the 'real' thing and denies JLR income in the huge china market. Legal’ need to do more protecting the brand and tackling ip theft and knockoffs from ccp government run companies.

Problems with the JAG side of things is its disgusting pipe and slippers elitist image which is stuck in the 1970's, sales are also declining because Jag loyalists are dropping dead. The average age of a buyer is the mid 60's and there isn't enough younger buyers to replace them because anyone under 30 thinks the brand is a joke and only old middle age curtain twitchers in the ‘burbs buy them as retirement toys. This stigma will make people write off even considering buying a jag when they are older and have more disposable income so in turn the key demo of the 35-50 buyer will end up buying a BMW, Lexus, VAG or Merc alternative..

JAG need to address the fact that the brand has an image problem. Jag needs to reinvent its brand for the 21st century targeting a more ethnicity diverse buyer, Jag appeal too much to a demographic that does not exist in big enough numbers any more. Too add to that the xe is a sales flop , xf not competitive compared to the Japanese and Germans, F type is overpriced..

TATA need to do take action quick with Jag because its rapidly deciding sales is mostly self inflicted due to hubris, ageing designs, moronic snob dealers and rotten management at hq

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