Jaguar Land Rover boosted by sales rebound in China and US

Jaguar Land Rover made £534m of profit between January and March as car sales rebounded in China and the US, although the company fell to a full-year loss after writing off the costs of old technology.

Under a strategy laid out in February by new boss Thierry Bolloré, the group took a £1.5bn financial hit to past investments as it pivots to electric vehicles and ends its long-running reliance on diesel.

The accounting costs mean the company posted a pre-tax loss of £861m for the financial year to the end of March.

Like other carmakers, JLR has been boosted by a revival of sales in China after the worst of the pandemic.

Revenues in the quarter to March were up 20 per cent to £6.5bn, but over the whole year they were down 14 per cent at £19.7bn despite stronger sales from China.

Only a third of the models sold in the last quarter ran purely on internal combustion engines. Just over half used a “mild hybrid” system with a small battery, while 9 per cent were either plug-in hybrid or fully electric.

The company expects to have phased out any sales of non-hybrid or electric models by 2025, Bolloré told the FT’s Future of the Car summit last week.

The new strategy paves the way for Jaguar to become a fully electric brand from 2025, while the company expects two-thirds of its sales by the end of the decade will be electric models.

JLR also warned the chip shortage that has swept the industry and forced the company to close its UK plants “has become more difficult to mitigate”.

It expects company profitability this year to recover to a 4 per cent margin, up from 2.6 per cent last year, growing to at least 7 per cent by 2024 and then at least 10 per cent by 2026.

Sales of the Land Rover Defender, which was launched last year, were 17,000 in the final quarter of the year, almost ahead of the entire Jaguar brand at 23,500, and even the combined sales of the mainstream Discovery and Discovery Sport models at 22,300.

Bolloré, who joined in September, said: “In my first set of full-year results as CEO of Jaguar Land Rover, I have been encouraged by the company’s resilience and strong recovery during a uniquely challenging year.

“Jaguar Land Rover is well placed to emerge from the pandemic as a stronger and more resilient company that is able to navigate and capitalise on the opportunities ahead.”