Jaguar Land Rover Turns Quarterly Loss Into Profit As China Improves

Financially troubled maker of sports cars and luxury SUVs Jaguar Land Rover’s (JLR) recovery continued in its third quarter as it turned a loss into a profit, helped by improved sales in China and the launch of its new Range Rover Evoque.

British-based and Tata Motors of India owned JLR reported pre-tax profit of 318 million pounds ($416 million) in the third quarter ended December 2019, compared with a loss of 273 million pounds ($358 million) in the same period of 2018. The 2018 result was before a charge of 3.1 billion pounds ($4 billion).       

In the year ended March 2019, JLR lost $4.6 billion and said it was cutting 4,500 jobs as part of a turnaround policy.

Revenues in the latest quarter rose 2.8% to 6.4 billion pounds ($8.4 billion). JLR said sales in China, which had been the major cause of losses, improved by 24.3%, but it gave no details. Sales of the Range Rover Evoque compact SUV rose 30%.

“The improvement reflected a combination of the higher China volume, stronger product mix, lower operating costs and favorable foreign exchange. Margins also turned positive year-on-year with an EBIT (earnings before interest and tax) margin of 3.3%,” JLR said in a statement.

Earlier, the Financial Times had reported CEO Ralf Speth was retiring in September. The statement made no reference to this, or who might replace him.

JLR recently announced it was cutting 500 jobs from its Halewood plant, where it employs about 5,000, and builds the Evoque and Land Rover Discovery Sport.

Overall British auto production has been falling steadily as uncertainty over the Brexit negotiations induced anxiety amongst buyers and made it difficult for manufacturers to plan ahead, with no knowledge of what trade arrangements would be forthcoming with the EU.

The Society of Motor Manufacturers and Traders, which speaks for British car makers and importers, announced Thursday that British auto manufacturing fell for the third consecutive year in 2019 by 14.2% to 1.3 million, the lowest since 2010.

But the general election on December 12 resulted in a big win for the conservative party and brought some certainty to the process. Britain officially leaves the EU Friday, and has the rest of the year to negotiate a free trade deal.

Meanwhile, as JLR stumbled, reports gathered pace that Tata Motors would seek to sell it. In June, JLR and BMW announced a plan to collaborate on developing electric motors and transmissions. Late last year rumours circulated that Tata was seeking a partnership for JLR with BMW or China’s Zhejiang Geely Holding.