JLR in fast lane with record revenues

Vehicle manufacturer Jaguar Land Rover has reported record third-quarter revenues, although pre-tax profit for the period is down almost 50% compared with the same period in the previous year.

The UK’s largest car manufacturer, which employs about 4,500 people at Halewood on Merseyside, reported a 13% increase in revenues to £6.5bn, with strong customer demand in the three months to December 31, 2016.

Total retail sales of 149,288 vehicles were up 8.5% year-on-year and established a new period record for the company, which benefited from higher volumes in China, (up 38.4% including sales from the Chinese joint venture with Chery), North America (up 19.8%) and Europe (up 7%).

The performance was led by strong sales of the Discovery Sport, Jaguar F-Pace and the Jaguar XF (including the new long wheelbase Jaguar XFL in China).

Nevertheless, the company revealed pre-tax profit for the period declined to £255m (Q3 2015/15: £499m). It has blamed the performance on the run-out of the old Discovery ahead of the new model, unfavourable foreign exchange revaluation, higher marketing expense and depreciation and amortisation, although this was partially offset by further recoveries related to the 2015 Tianjin Port explosion.

Pre-tax profit for the first nine months of 2016/17 was also down, at £934m (2015/16: £980m).

Free cash flow was a positive £54m for the quarter after £926m of total investment spending.

Jaguar retailed 45,364 vehicles in Q3, up 90.3% as sales of the F-Pace continued to grow and demand for the long wheel base XFL in China increased.

Land Rover retailed 103,924 vehicles in the period, down 8.7%, with strong sales of the Discovery Sport more than offset by the run-out of the outgoing Discovery, ahead of the start of sales of the all-new Discovery later in the fourth quarter.

Dr Ralf Speth, Jaguar Land Rover CEO, said: “Continuing expansion and innovation in our compelling product range have driven up global revenues and retail unit sales, led by the Jaguar F-Pace, Jaguar XF, and Land Rover Discovery Sport.

“Models such as the all-new Discovery mark the latest step in our investment programme, which will underpin long-term profitable, sustainable growth.”

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