Jaguar earnings boosted by China sales and rollout of Land Rover Defender

Jaguar Land Rover has become the latest carmaker to shrug off the pandemic’s impact with strong profits in the final months of 2020, joining Daimler and Volkswagen in riding a wave of fresh demand from China.

The Range Rover maker edged into profit for its financial year so far after a strong three months at the end of 2020 boosted by Chinese sales and the faster rollout of its new Land Rover Defender.

Germany’s Daimler and VW have both posted record earnings for the final quarter of 2020, on the back of a faster-than-expected recovery in China.

JLR, owned by Tata Motors, turned a £439m pre-tax profit between September and December, about £121m higher than the same period a year earlier, and £374m higher than the previous three months, it said on Friday.

The group said it had recorded a pre-tax profit of £91m over the first three quarters of its financial year, which runs from April to March.

Chief executive Thierry Bolloré, who joined in September, said the result “is a credit to the outstanding efforts of the employees of Jaguar Land Rover to overcome many challenges this year”.

The group also faces a £35m fine for missing its European CO2 targets in 2020, it said.

Its fine was reduced from £90m after a flurry of late sales of hybrid models in the last quarter of 2020, giving it a final annual average of 134g of CO2 per km, just shy of its target of 132g.

It also paid £28m in the US and China to buy emissions credits from rivals in order to bring it into line with the respective rules.

Mr Bolloré, formerly the chief executive of Renault, is expected to set out a new strategy within weeks that will focus on electrification and reviving the Jaguar brand.

While JLR has a lucrative line-up in its Range Rover brand, the company has been burdened by too many overlapping models in its three nameplates and slow to roll out electric technology into its core range.

More than half of all JLR vehicles sold during the quarter were partly electrified, including a third of models using a “mild hybrid” system with a 48-volt battery that eases the strain on the engine, but not enough to drive the wheels on its own.

Some 12 per cent of sales were either battery electric cars or hybrids that can plug in, while the company’s once-dominant diesel vehicles fell to a quarter of sales.

Despite being stung by the pandemic, the industry has bounced back because of robust demand in China, the world’s largest car market.

JLR said sales in China were now above pre-pandemic levels, while sales in all markets except the UK rose during the three months, the group said.

Chief financial officer Adrian Mardell said: “While sales have not yet fully recovered to pre-Covid levels in most markets, it was pleasing to see China sales up year on year for the second quarter in a row and sales of the new Land Rover Defender continuing to grow.”

The much-heralded Defender, launched last year with a slightly delayed rollout because of the pandemic, outsold the Jaguar saloons in the quarter, and was fast approaching the combined total of Jaguar’s sport utility vehicle sales for the quarter.