Last year JLR invested £110m in its Halewood factory to upgrade it for the new Evoque and soaring sales of the vehicle have pushed the company back into the black. Tony McDonough reports
Carmaker Jaguar Land Rover (JLR) has returned to profit thanks to surging global sales of the Merseyside-produced Range Rover Evoque.
Last year JLR invested £110m in its Halewood factory to upgrade it to assemble the new generation Evoque and that is now paying dividends with the vehicle’s sales across the world soaring by almost 55%.
This helped the company, which employs more than 4,000 people at Halewood, achieve an 8% rise in revenues to £6.1bn for the three months to September 30. And, crucially, JLR reported a a pre-tax profit of £156m for the period, against a £90m loss for the same period last year.
Much of the improvement is attributed to a 24.3% year-on-year increase in Chinese sales. The company has worked to improve relations with dealers in China and address supply issues to its manufacturing plant in the country. Overall sales fell 0.7% and by 5% in the UK and there was a 20% fall in markets outside Europe, North America and China.
JLR’s Project Charge transformation programme contributed £162m of cost improvement and £285m reduction in investment spending in the quarter. With £2.2bn efficiencies achieved to date, JLR remains on track to achieve the full targeted £2.5bn, March 31, 2020 and further improvements beyond then. The programme has seen its global workforce cut by 4,500.
JLR is still concerned about the possible impact of Brexit on its UK business, whether Britain leaves with or without a deal. The company plans to shut down its three assembly plants in Merseyside and the West Midlands for a week in November. This is in order to adjust production due to Brexit and lower demand for diesel cars.
Chief executive Ralf Speth said: “We were one of the first companies in our sector to address the challenges facing our industry. As such, it is encouraging to see the impact of our Project Charge transformation programme and our improvement initiatives in the China market start to come through in our results.”