A global shortage semiconductor chips has hit production at Jaguar Land Rover in Merseyside and sent the company into the red for the quarter to June 30. Tony McDonough reports
A global shortage of semiconductor chips has pushed carmaker Jaguar Land Rover (JLR) into the red for the three months to June 30.
Despite seeing a rise in sales and a strong order book, JLR reported a quarterly loss of £110m from sales of £5bn. However, the loss was still much lower than the loss of more than £400m reported for the same quarter last year at the height of the pandemic.
Retail sales in the quarter, the first of JLR’s fiscal year, were 124,537 vehicles, up 68.1% year-on-year as sales continued to recover. However JLR, which which assembles the Range Rover, Evoque and the Land Rover Discovery Sport models at its Halewood factory in Mersyside, said it expected the chip shortage to worsen in the current quarter.
Sales were higher year-on-year in each key region including in the UK (+186.9%), Europe (124%), overseas (71%), North America (50.5%), and China (14.0%). Retail sales of all model families increased year-on-year. Electrified vehicles made up 66% of JLR’s retail sales in the quarter.
In its trading update, JLR said: “We are encouraged by the continuing recovery in sales and the very strong demand for our products with record order books. However, the global shortage of semiconductors continues to be a challenge which has constrained our financial results in the first quarter.
“The continued increase in COVID vaccination rates are encouraging for the ultimate recovery of the global economy and automotive industry, however, there is still uncertainty with the infection rates rising as a result of the spread of the delta variant.
“The shortage of semiconductors is presently very dynamic and difficult to forecast. Based on recent input from suppliers, we now expect chip supply shortages in the second quarter ended September 30, 2021, to be greater than in the first quarter, potentially resulting in wholesale volumes about 50% lower than planned.
“We are continuing to work to mitigate this. We expect the situation will start to improve in the second half of our financial year.”
Thierry Bolloré, JLR’s chief executive, added: “We are pleased to see a continuing positive recovery from the pandemic, with year-on-year growth in all regions, demonstrating the appeal of Jaguar and Land Rover vehicles.
“Though the current environment continues to remain challenging, we will continue to adapt and manage elements that are within our control and ensure that Jaguar Land Rover is well-placed to respond to any further market developments.”