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Jaguar Land Rover Q1FY21 retails decline 42% on covid impact

The Jaguar Land Rover logo is seen at a dealership, following the outbreak of the coronavirus disease, Milton Keynes, Britain (Photo: Reuters)
The Jaguar Land Rover logo is seen at a dealership, following the outbreak of the coronavirus disease, Milton Keynes, Britain (Photo: Reuters)

With retails of 55,280 units, Land Rover sports utility vehicles contributed almost 75% of total JLR sales for the quarter, although the volumes were down 38% YoY. The Jaguar sales were at 18,787 units, down 53% YoY, for the June quarter

Tata Motors Ltd’s luxury car subsidiary Jaguar Land Rover (JLR) has reported a decline of 42% YoY in its retail sales at 74,067 units for the June quarter. The drop in retail sales comes on the back of the pandemic-induced global economic crisis.

With retails of 55,280 units, Land Rover sports utility vehicles contributed almost 75% of total JLR sales for the quarter, although the volumes were down 38% YoY. The Jaguar sales were at 18,787 units, down 53% YoY, for the June quarter.

The company had earlier suspended production at its UK-based manufacturing plants during the last week of March to prevent the fast spreading disease. Later it resumed operations at its Solihull (UK), Slovakia and Austria units from May 18. Meanwhile, JLR’s joint venture plant in Changshu, China had resumed operations from the last week of February.

JLR said that strict lockdowns and social distancing measures for covid-19 resulted in temporary shutdowns of most retailers and the company’s manufacturing plants in April and much of May.

The British carmaker updated that over 95% of its retailers worldwide are now open (or partially open) and all plants, except the Castle Bromwich facility, have resumed manufacturing.

“The Castle Bromwich facility will gradually restart in August. All plants are operating on single shifts with social distancing measures in place and production (is) ramping up as demand grows," the company said in a note today.

JLR’s global retails in June stood at 35,334 units, down 25% YoY. That included Land Rover sales of 26,621 units (down 17% YoY) and 8,713 units of the Jaguar sedans, which saw a dip of 42% YoY.

The company reported that China is leading its recovery as the retail sales were down only 2.5% YoY for the June quarter. “Lockdown measures were lifted earlier than in other regions and the solid recovery continues," the company said in a statement, referring to its China business.

Meanwhile, the retail volumes for Q1FY21 in the other major markets such as North America were down 32%, the UK was down 70%, Europe down 59% and overseas sales were down 47%.

“While the covid-19 pandemic continues to impact the global auto industry, we are pleased to see initial green shoots of recovery. We are working alongside our retailers, planning for gradual recovery as lockdowns relax and economies respond," said Felix Brautigam, JLR chief commercial officer.

He added that the company continued to introduce new models to positive response through the quarter.

The company said that although all models saw lower YoY sales through the quarter, Range Rover Sport, Range Rover Evoque and Land Rover Discovery Sport drove the demand.

JLR is heavily betting on its recently launched SUV Land Rover Defender, which has an order of more than 22,000 units and saw deliveries of 1,970 units in June after starting retails in the UK and Europe in May and the USA in June. The deliveries of the Defender will begin in China from July.

The company said it has ended the June quarter with cash of GBP 2.7 billion and overall liquidity of about GBP 4.6 billion including it’s GBP 1.9 billion undrawn credit facility. In an attempt to further boost liquidity and turn JLR cash positive by FY22, the management has planned strict cost control and capex roll back measures during the fiscal.

PB Balaji, chief financial officer at Tata Motors had earlier said that while JLR’s capex for FY21 will be rolled back from GBP 4 billion to GBP 2.5 billion, new cost saving plans are implemented aiming for savings of GBP 5 billion by March 2021, up from the previous target of saving GBP 4 billion for the same duration under project charge and charge plus.

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