Jaguar Land Rover posts surprise sales surge in China

While JLR lost 501 million pounds ($630 million) before tax in the three months ended March 31, sales in China gained 4.2% in May from a year earlier.
By : Bloomberg
| Updated on: 16 Jun 2020, 10:23 AM
The Jaguar Land Rover logo is seen at a dealership, following the outbreak of the coronavirus disease, Milton Keynes, Britain (REUTERS)
The Jaguar Land Rover logo is seen at a dealership, following the outbreak of the coronavirus disease, Milton Keynes, Britain (REUTERS)
The Jaguar Land Rover logo is seen at a dealership, following the outbreak of the coronavirus disease, Milton Keynes, Britain (REUTERS)
The Jaguar Land Rover logo is seen at a dealership, following the outbreak of the coronavirus disease, Milton Keynes, Britain

Jaguar Land Rover said it’s seeing the beginnings of a demand rebound in China as the world’s second-largest economy opens up after months of inactivity following the coronavirus outbreak.

While JLR lost 501 million pounds ($630 million) before tax in the three months ended March 31, sales in China gained 4.2% in May from a year earlier as all of its retailers there reopened for business, according to a statement Monday. Britain’s largest carmaker is also seeing improvements in the US and Europe, though the UK and other countries have yet to recover from lockdowns.

JLR will still cut 1,100 contract workers engaged in manufacturing across various factories to help hold down costs. The unit of India’s Tata Motors Ltd. held off eliminating permanent posts among its 38,000 workers. JLR is tapping the British government’s furlough scheme as it assesses how fast demand is likely to revive.

Similar Cars

Find More Cars
Land Rover Range Rover Evoque (HT Auto photo)
Land Rover Range Rover Evoque
1998 cc | Diesel | Automatic (Torque Converter) | 14.71 kmpl
₹64.12 - 66.6 Lakhs**Ex-showroom price
Land Rover Range Rover Velar (HT Auto photo)
Land Rover Range Rover Velar
1997 cc | Petrol | Automatic (Torque Converter) | 13.16 kmpl
₹79.87 - 80.71 Lakhs**Ex-showroom price
Land Rover Range Rover Sport (HT Auto photo)
Land Rover Range Rover Sport
1997 cc | Petrol | Automatic (Torque Converter) | 9.26 kmpl
₹91.27 - 2.19 Lakhs**Ex-showroom price
Land Rover Range Rover (HT Auto photo)
Land Rover Range Rover
2996 cc | Petrol | Automatic (Torque Converter) | 9.43 kmpl
₹2.11 - 4.38 Cr**Ex-showroom price
Tata Tiago (HT Auto photo)
Tata Tiago
1199 cc | Petrol | Manual | 19.8 kmpl
₹4.7 - 7.05 Lakhs**Ex-showroom price
Tata Tiagoev (HT Auto photo)
UPCOMING
Tata Tiagoev
 
₹5 - 7 Lakhs* *Expected Price

“In China, we are beginning to see recovery in vehicle sales and customers are returning to our showrooms," Chief Executive Officer Ralf Speth said in the release. The company is gradually resuming production at its main Solihull and Halewood factories in the English Midlands, as well as at UK engine plants and its sites in Slovakia and Austria.

(Also read: Jaguar Land Rover raises $705 million loan from Chinese banks)

After struggling in China and dealing with uncertainty around Brexit, JLR initiated a 2.5 billion-pound cost-cutting drive that has already featured thousands of job losses worldwide. The plan, called Charge, has now been expanded to target savings of 5 billion pounds by March 2021, it said.

FILE PHOTO: JLR will still cut 1,100 contract workers engaged in manufacturing across various factories to help hold down costs.
FILE PHOTO: JLR will still cut 1,100 contract workers engaged in manufacturing across various factories to help hold down costs. (REUTERS)
FILE PHOTO: JLR will still cut 1,100 contract workers engaged in manufacturing across various factories to help hold down costs.
FILE PHOTO: JLR will still cut 1,100 contract workers engaged in manufacturing across various factories to help hold down costs. (REUTERS)

The UK manufacturer said it is reducing capital spending by about 25% by deferring “lower margin" and non-critical investments. It had a negative 1.5 billion-pound cash flow in April and May with its facilities shuttered.

Tata Results

Parent Tata Motors posted a quarterly loss of 98.94 billion rupees ($1.3 billion), the highest on record. The success of JLR is crucial for Tata, which is acquired the UK maker of sports cars and luxury SUVs in 2008, and is struggling with an Indian sales slump that began even before Covid-19 wiped out demand.

(Also read: Jaguar Land Rover enhances online car-purchase experience)

“The speed with which it has come has indeed been a pleasant surprise," group finance chief P.B. Balaji said of the Chinese sales resurgence. “Obviously there is something happening there, but I would want to be cautious. Let’s watch it for a few more months before we say now there really is a roaring recovery."

Tata Motors’ shares rose as much as 3% before gains to trade little changed at 101 rupees as of 9:42 a.m. in Mumbai. They have lost 45% of their value so far this year.

Tata plans to save 60 billion rupees in its domestic business, and is looking for a partner for its cars and SUV business in India, he said.

First Published Date: 16 Jun 2020, 10:23 AM IST
Recommended For You
View All
NEXT ARTICLE BEGINS

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking VIEW OFFERS you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city