Jaguar Land Rover Return To Profits For Second Half Of 2019
Jaguar Land Rover has announced profits for 2019/2020; due to increased sales in China in the last three months of the year. The Midlands-based company forecast losses for the year, based on a £90mn shortfall for the same quarter in the previous year, however, buoyant sales in China from September 2019 gave the Tata-owned carmaker a final profit for the year of £156mn before tax.
JLR Chief Commerce Officer, Felix Brautigam, said:
“2019 was a year of two halves for Jaguar Land Rover. Over the last six months, we saw a marked improvement in China, where intensive work with our retailers, combined with significant process and product improvements are starting to gain traction. Elsewhere, adverse market conditions continued to affect the industry.”
JLR Return To Profits
The start of this financial year was marked by redundancies and an effort to handle the backlash from the diesel emissions fiasco.
These issues were compounded by Brexit preparations, which involved a huge disruption to the car maker’s production schedules. The second-quarter profits were boosted by a 24.3% increase in Chinese sales, giving a total of £6.1bn, which was an 8% increase on year-on-year revenues.
JLR does have a Chinese manufacturing arm, based in Changshu. This will have contributed to its excellent performance within the local market. Overall sales in the UK for the period dropped by 5%, and sales across all other countries dropped by 20%.
Poor sales performance prompted JLR to carry out an intense cost-cutting programme from early 2019; this has resulted in £2.2bn worth of savings as of September 2019. A total of 4,500 redundancies across the business were announced in January 2019.
The company has invested over £841mn in spending and had an operating cash outflow of £64mn. This gave an impressive improvement of £559mn overspending and outflow against the same quarter in the previous year. Jaguar Land Rover believe their business is on track to a total £2.5bn cost/cashflow improvement by the end of March 2020.
This will be on the back of the new Land Rover Discovery Sport and Jag XE launches, combined with very high demand for the existing Range Rover Sport and Evoque models.