Companies

Good times ahead for JLR

Parvatha Vardhini C BL Research Bureau | Updated on January 19, 2018


Jaguar Land Rover may have recorded a 25 per cent fall in profits in the quarter ended December 2015, over the same period last year. But its performance is on the mend. For one, compared to the lacklustre sales in the earlier months, JLR has seen double-digit volume growth since October 2015, backed by vehicles such as the new Jaguar XE, Jaguar XF and Discovery Sport.

Strong demand from the US, the UK and other European markets has also helped. For the three months ended December 2015, JLR’s retail volumes have grown 23 per cent over the same period last year. Secondly, although the general economic slowdown has brought down China’s share in the overall volumes from 28 per cent a year ago to about 11.5 per cent now, JLR’s Chinese joint venture is warming up.

The joint venture (JV) sold about 9010 vehicles (retail) in the October-December 2015 period, almost double that of the first six months of this fiscal. In the months to come, the expected introduction of the new Jaguar XE in the US markets, the 2016 XJ and the upcoming F-PACE crossover are expected to continue to support sales globally.

However, higher marketing costs for the launches, price corrections due to soft economic conditions in China and the ongoing JV ramp up may continue to pressure margins.

EBITDA margins for JLR came in at 14.4 per cent in the current quarter compared to 18.6 per cent a year ago.

Published on February 11, 2016

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