Big profit improvement for Jaguar Land Rover

Pre-tax profits were £439 million, up £374m on the previous quarter and £121m year-on-year

Revenue was £6 billion, up £1.6bn from the three months to the end of September.

JLR, which has its engine manufacturing centre at the i54, Wolverhampton, had sales of 128,469 cars, up 13.1 per cent on the quarter but still nine per cent lower than pre-Covid levels a year ago.

Sales in China were up 20 per cent on the quarter and 19.1 per cent year-on-year.

Sales of the new Land Rover Defender grew to 16,286, a 66 per cent increase on the previous three months.

Profit and cash improvements from the Project Charge transformation programme in the quarter were £400m. Savings for the year to date total £2.2bn and the company is well on track to deliver the £2.5bn target for the full year ending March 31.

Sales have not yet fully recovered to pre-Covid levels in most markets.

JLR was encouraged by the Brexit trade deal agreed in December between the UK and the European Union. This has avoided the risk of tariffs on automotive parts and finished vehicles, although there will still be increased customs administration requirements.

It also sees the approval of effective Covid-19 vaccines as encouraging, with the promise of an eventual end to the pandemic.

While current infection rates and associated restrictions are a challenge, all of the company’s plants and the majority of retailers are open.

Although Covid and other risks remain, the company continues to expect to generate strong profit margins and positive free cash flow in the fourth quarter.

Chief executive Thierry Bollore said: "I am encouraged by the improved financial performance in this first full quarter as CEO of Jaguar Land Rover. This performance is a credit to the outstanding efforts of the employees of Jaguar Land Rover to overcome many challenges this year and I would like to thank every one of our colleagues for their contribution, particularly those who are working safely in our plants and facilities.

"Looking ahead, these challenges continue, including the Covid pandemic and its impact on the global economy, the UK’s new trading relationship with the EU and the significant technological changes taking place in the automotive industry. In this environment, I’m working with my management team on plans to realise an exciting future for Jaguar Land Rover, which I look forward to sharing in due course."