Over the period of January-November 2016, the ageing Discovery 4 sold 46,800 units. Over the same period last year, sales of the Discovery 5, which was launched in 2017, were just 32,232. And that number was also a 19% drop on the sales figures for the same period in 2018.
With the clearly defined Defender just weeks from the showroom, reinventing the Discovery to re-establish itself as distinct member of Land Rover’s growing premium family is going to be a significant hurdle – albeit one for the future.
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In a financial presentation last November, JLR revealed that its profit margin between April and September recovered from the previous year’s -2.2% to -0.2%. Furthermore, that improvement accelerated to 4.8% in the July to September period.
This was partly because of much-improved sales in China (up 24% between April and June) as well as selling higher-specification cars and saving money on its manufacturing operations.
In the same summer period, JLR also came close to paying for its huge investments in the new-generation MLA vehicles – a massive £841 million over three months – from the cash it generated from sales.
This is a crucial achievement that means JLR is able to invest in the future without leaving itself hugely indebted.
Powertrain co-operation is key to survival
Some analysts believe JLR’s massive £3 billion write-down in ’property plant and equipment’ at the beginning of last year was related to phasing out some of its own engine development and instead turning attention to working with BMW on future electrified drivetrains.
JLR already has plans to make electric drive units at its Wolverhampton engine plant, and a battery factory at Hams Hall, coincidentally next to BMW’s UK engine factory, is on the cards, too.
JLR has also told investors it will greatly reduce its workforce in mechanical engineering, again pointing towards plans for significant co-operation with other car makers on powertrains and platforms as the huge costs of moving to electrification crush the premium brands.
According to JLR’s financial documents, the firm will spend up to £4bn a year for the next three years on new investments and research and development.
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