Production delays and China lockdown constrain Jaguar’s profits
Covid-induced production delays and the impact of China’s lockdown have constrained Jaguar Land Rover’s quarterly profits.
In the three months ended 30 June, the luxury marquee posted a loss before tax of £524m, despite a record 200,000 client orders.
This comes on the heels of its Indian owner, Tata Motors, suffered a loss of 50 billion rupees (£520m).
Ongoing semiconductor delays – worsened by the recent lockdown in China – impacted the production of the new Range Rover and Range Rover Sport.
This pushed down retail and wholesale levels as the two models, plus the Defender, accounted for more than 60 per cent of client orders.
Retail sales went down 37 per cent on 2021 levels, to 78,825 vehicles, while wholesale volumes slumped by 6 per cent.
Wholesales had a knock-on impact on revenue, which went down to £4.4bn – 7.6 per cent down on the previous quarter.
“Although headwinds from the global semiconductor supply and Covid lockdowns in China have impacted our business performance this quarter, I am pleased to confirm that we have a completely reinforced organisation setup to respond to the semiconductor crisis,” said chief executive Thierry Bollore.
“This is now starting to recover production growth to achieve greater volumes and will allow us to take advantage of our record order book in the second quarter.”
Despite the ongoing headwinds, the manufacturer has remained positive, continuing to target a 5 per cent earnings’ margin and a £1bn positive free cash flow over the full year.