Effectively, this is Jaguar Land Rover trying to draw a line under past mistakes by taking one big hit, preparing the firm to move forward under its ‘Charge’ and ‘Accelerate’ turnaround and transformation plans. Through those plans, Jaguar Land Rover is targeting more than £2.5bn worth of savings, which we already know includes the loss of 4500 jobs, this year.
Jaguar Land Rover is also investing in the future; in the final three months of 2018, it invested £1bn, including funding for an engine manufacturing centre to build electric motors, and a battery assembly centre. Both will be located in the UK and help the firm’s plans to offer an electrified version of every model in its line-up from 2020 on.
So it is possible to spot some positives, but the challenge the company faces in staging a turnaround is highlighted by that £273m pre-tax loss in the last quarter. For Jaguar Land Rover to stage a recovery, first it has to halt the decline.
Jaguar Land Rover says the primary reason for that £273m loss was “challenging market conditions” in China, where car sales have dropped sharply in the past year. The firm’s October-December sales in China of 22,100 cars was down 47.1% year on year (compared with a market decline of 15%), enough to offset strong – and above industry average – sales growth in the UK (up 18.4%) and North America (up 21.1%).
Again, it is possible to spot some positives here. Along with the E-Pace, Jaguar’s I-Pace electric SUV was one of the firm’s few models to increase its sales in the last quarter (Jaguar’s saloons notably struggled). It is, however, notable that both those models are built under contract in Austria, so Jaguar’s margins on them will be lower.
The success of the I-Pace is well-deserved, given Jaguar beat the likes of Mercedes, BMW and Audi to the market with a premium SUV. But that raises questions: we know those firms are gearing up to launch vast ranges of EVs in the coming years. Publicly, at least, there are few signs of Jaguar Land Rover following up the I-Pace. While electric cars still represent a small fraction of the car market, it is a clear growth area that Jaguar Land Rover could capitalise on, particularly in China.
That £3.4bn hit is the latest in a string of painful actions (especially for those losing their job) Jaguar Land Rover has taken to pay for past mistakes. The next step is to find the right way forward. The new Range Rover Evoque should help, and the forthcoming Land Rover Defender will be key. Bolder actions may be required: Autocar has already revealed the firm is considering turning Jaguar into an electric-only brand. As of yet, that plan has not been signed off.
Still, Jaguar Land Rover’s recent actions have shown that company bosses are prepared to make difficult decisions in order to move forward. Which, even if it can’t sugarcoat a £3.4bn loss, is at least a potentially positive sign for the firm’s future.
Read more
Jaguar Land Rover posts £3.4 billion loss in final three months of 2018
Opinion: Why JLR's job loss announcement could mark the first day of Jaguar's salvation (from January 2019)
Jaguar Land Rover confirms 4500 job losses as part of transformation plan
Jaguar Land Rover to electrify entire range from 2020
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FM8
However AC want to report
They'll be a few top industry execs pondering the thought of taking up any offers when the current lot are assisted through the door.
Paul Dalgarno
Land Rover Defender will not be key
It's a reatively niche product, and has come about because of bullish previous financial results goading them into developing it. Yes it's a talisman product of it's past, but where's the significant market?
autoindustryinsider
The B word
No mention of the elephant in the room: Brexit.
If the Tories get their way and deliver Brexit then it'll be curtains for the UK auto industry. There is no rational benefit that Brexit could deliver that isn't already within this country's power. The electorate were sold a lie over many years, and those that want it so badly have NO plan, NO conception of the damage they are about to wreak. Some of them even stand to benefit from shifts in the markets and currencies (Jacob Rees Mogg's father literally wrote the book on disaster capitalism).
The prospect of Brexit keeps us in the industry awake at night, and sharpens our focus at work as we strive to do what we can to mitigate against these current difficulties. Difficulties borne of factors like Trump's trade war with China and the UK government's demonisation of diesel. Hard Brexit is the factor that makes our sector unviable, so don't go wishing for it. Indeed any flavour of Brexit is bad news for the sector, the UK economy and the UK's standing in the world. I'm praying there's a way to avoid it.
kboothby
So therefore..
If March 29th delivers a "Hard Brexit" the UK car market will simply stop? Overnight all imports and exports will cease?
Global industries have had long enough to plan for all scenarios, they have been hampered by a British parliament who are, in the majority, euro-centric. Facts are simple really.. the UK is one of the largest economies in the world, it has been run (for too long) by politicians who are ashamed to be British. They have allowed themselves to be dictated to by global corporations who have a vested self interest in free movement of goods and people coupled with free movement of capital to minimise tax exposure. The "loss" of £3.4billion is a tax dodge - not an indication of the health of the company.
If we leave without a deal on 29th March it will be like Y2K all over again, the world keeps turning, planes will not fall out of the sky and I will still be able to buy a US built, German branded 4x4 on March 30th
hackjo
You'd better get more agile
BANG!!!
kboothby
eh? How many BANGS!!!
Before you disappear lol... are you immortal?
hackjo
Bits of me are.
BANG!!!
Ski Kid
threaten up to 50% duty in EC imports
That will then make them all re think and scramble back here to manufacture or they will lose market share,we are just too soft,with this duty the exports would be subsidized to ensure exports are maintained.people do not get the sea of change that is imminent and we need manufacturing back to offset the massive structural changes expected in retail over the next thirty years.The Uk has been ripped off ,easier to make Uk redundancies than say French or German,our money used to givejobs to Ford workers in Turkey making transits and the shutdown of the Southampton Ford facility.
scotty5
It's called democracy.
If the Tories get their way! Are you serious? The vast majority of politicians wanted a referendum. The Tories promised a referendum. The country voted in a Tory government. The Tories delivered on their promise, and we the people voted to leave the EU. So what on earth are you talking about by saying "If the Tories deliver Brexit..." ? It's called democracy.
Now before you go accusing me of being a Tory supporter - I'm socialist, someone who believes the power lies with the people.
lambo58
Curtains for the British car
Curtains for the British car industry?
What are you talking about?
We haven't got one besides the Morgan hobby car company
We are assemblers of other peoples cars.
We flushed our own car industry away years ago and now own nothing.
Simple as...
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