JLR posts revenue hike amid sales fall, China business continues to recover

A tyre is seen on Jaguar Land Rover's I-PACE concept car on display ahead of it's 2018 production launch as Jaguar's first fully electric SUV at their 'Tech Fest' in London | Reuters

Tata Motors-owned Jaguar Land Rover (JLR) on Thursday posted revenues of 6.4 billion pounds in the quarter ending December 2019, marking a 2.8 per cent rise year-on-year. The UK-based luxury carmarker said that while its total retail sales fell 2.3 per cent, sales in China continued to recover by going up 24.3 per cent and sales in North America increased by 1.1 per cent.

Its pre-tax profit increased to 318 million pounds in the last quarter, representing a 591 million pounds year-on-year improvement versus the 273 million pounds loss in the third quarter of last year.

"In the third quarter Jaguar Land Rover sustained year-on-year revenue and profit growth as we continued to transform our business," said JLR CEO Ralf Speth.

"Conditions in the automotive industry remain challenging but we are encouraged by the recovery in our China business and the success of the new Range Rover Evoque. Our proactive and decisive actions are creating a more robust, resilient business, transforming today for tomorrow," he said, as it was also announced that he would be stepping down as CEO at the end of his contract this September.

"Ralf developed Jaguar Land Rover from a niche UK centric manufacturer to a respected, technological leading, global premium company," said N Chandrasekaran, Chairman of Tata Sons, as he announced that Speth would be staying on with JLR in the role of non-executive Vice-Chairman and also on the board of Tata Sons.

"A search committee has been formed which will work with me to identify a suitable successor in the coming months," Chandrasekaran said.

Meanwhile, JLR said its Project Charge transformation programme has reduced operating costs by 154 million pounds, investment by 200 million pounds, and inventories by 405 million pounds in the previous quarter.

This brings the total cost and cashflow improvements to 2.9 billion pounds, exceeding the 2.5 billion pounds target three months ahead of schedule.

The company has now embarked on 'Project Charge +', the next phase of Project Charge, which will primarily target cost savings and deliver a further 1.1 billion pounds of cost and cashflow improvements for a total of 4 billion pounds of improvements by March 2021.

JLR, the UK's largest car manufacturer, had announced thousands of job cuts over the previous year and earlier this year as part of its cost-cutting drive.

The company said that despite the many challenges being faced by the automotive industry worldwide, Jaguar Land Rover continues to expect improved profitability and cashflow for the financial year ending 31 March 2020 but warned that coronavirus outbreak in China could have some impact on the profit outlook for the year.

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