Jaguar Land Rover makes £9 million loss but orders at record levels

The luxury cars group, which has its engine manufacturing centre at the i54 north of Wolverhampton, said revenue for the quarter was £4.7 billion – up 22 per cent on the July to September quarter.

JLR reported that earnings before interest and tax, and free cashflow in October to December were positive as supply and wholesale volumes improved.

The group said that while production and sales remain significantly constrained by semiconductor shortages, it continues to see strong demand for its products with global retail orders at record levels.

Wholesales to dealers in the quarter were 69,182 cars - up eight per cent on the second quarter with production volumes up 41 per cent to 72,184.

Retail sales in the three months were 80,126 vehicles - down 13.6 per cent on the quarter and 37.6 per cent down from October to December 2020.

The mix of electric vehicle retail sales increased to 69 per cent compared to 53 per cent a year ago.

Wholesales of the Range Rover model family were up 30 per cent on the previous quarter.

Demand remained strong with a record order book of almost 155,000 vehicles, up 30,000 from the second quarter reflecting strong demand for the new Range Rover, with deliveries for the model to start later in the current quarter.

Adrian Mardell, JLR’s chief financial officer, said: "It was encouraging to see a positive earnings before interest and tax margin and cashflow, despite chip supply constraining wholesales to 69,000 units in the quarter. It demonstrates the progress we’ve made in reducing the breakeven point in the business through mix optimisation and cost efficiencies so we will be well placed as supply and sales volumes improve."

The Refocus transformation programme has delivered £1bn of value in the first three quarters of 2021-2022 through digital initiatives, market performance, cost efficiency and investment. The programme is now expected to achieve £1.4bn of value in the financial year, beating the original £1 billion target.

Semiconductor supply improved somewhat during the quarter, but the shortage is expected to continue through 2022 although it is expected to gradually improve as capacity within the supply base increases.

With this gradual expected improvement, JLR expects fourth quarter profits to improve.

Thierry Bollore, JLR’s chief executive, said: "Whilst semiconductor supplies have continued to constrain sales this quarter, we continue to see very strong demand for our products underlining the desirability of our vehicles.

"The global order book is at record levels and has grown an incredible 30,000 units for the new Range Rover before deliveries even start this quarter. We continue to execute our Reimagine strategy to realise the full potential of the business and create the next generation of the most desirable luxury vehicles for the most discerning of customers."