Carmaker Jaguar Land Rover reports losses of £524m for the three months to June 30 as it continues to battle with computer chip shortages. Tony McDonough reports
Jaguar Land Rover (JLR) is blaming the continuing shortage of semiconductor chips for another hefty loss.
For the three months to June 30, the first quarter of its fiscal year, the carmaker is reporting pre-tax losses of £524m. This is against a loss of £110m for the same period in 2021. Sales of £4.4bn were also lower than the £5bn reported a year ago.
JLR employs around 3,700 people at Halewood in Merseyside assembling the Land Rover Discovery Sport and Range Rover Evoque. Along with factories in the West Midlands, the plant has seen temporary production shutdowns due to the chip shortage.
However, the company remains upbeat about its prospects for the next few months. Demand remains strong with a record 200,000 client orders. Range Rover, Range Rover Sport and Defender account for over 60% of the orders.
At the beginning of July JLR said it had sold 78,825 vehicles during three months to June 30. This was 37% down on the same period in 2021. Land Rover’s sales came in at 63,618, 48% down on a year ago. Sales of Jaguar models were down 33% to 15,207.
Thierry Bolloré, JLR’s chief executive, said: “Although headwinds from the global semiconductor supply and COVID lockdowns in China have impacted our business performance this quarter, I am pleased to confirm that we have a completely reinforced organisation setup to respond to the semiconductor crisis.
“This is now starting to recover production growth to achieve greater volumes and will allow us to take advantage of our record order book in the second quarter.
JLR says the chip supply is expected to gradually improve. This will be supported by continuing senior management engagement and new partnership agreements with suppliers.
It is also reporting liquidity of £5.2 bn, including £3.7bn cash at June 30 and £1.5bn undrawn revolving credit facility from July.
The company added that its Reimagine strategy “continues at pace”. It aims to achieve net zero carbon emissions across its supply chain, products and operations by 2039.
Transformation of Jaguar into an all-electric luxury brand remains on track with the first new vehicles to be revealed before end 2024.