Jaguar Land Rover targets more savings as profits rise
JaguarLand Rover posted a pre-tax profit of £318 million in the final quarter of 2019, boosted by the popularity of the new Range Rover Evoque, recovering sales in China and the success of a major cost-cutting drive.
The British firm posted revenues of £6.4 billion in the three-month period, up 2.8% year-on-year despite a 2.3% dip in total sales. That slight decline was offset by the popularity of the new Evoque – with sales up 30% year-on-year – and the recently updated Land Rover Discovery Sport. Jaguar Land Rover was also helped by the continued recovery of its sales in China, up 24.3% year-on-year.
The £318 million pre-tax profit compares to operating losses of £273 million in the final quarter of 2018. The firm credited the turnaround, which began when it posted a profit in the previous quarter, to the impact of its Project Charge restructuring programme, which it says has reduced operating costs by £154 million and investment by £200 million. Since the programme began, Jaguar Land Rover says it has achieved £2.9 billion in savings, exceeding the original target of £2.5 billion three months ahead of schedule.
The firm has now launched Project Charge+ as the next phase in the restructuring, with the aim to save a further £1.1 billion of cost and cashflow improvements – bringing the total to £4 billion - by March 2021.
“Our improving financial results and the cost and cashflow achievements of Project Charge will support the next phase of our pipeline of exciting new vehicles and technologies, with a choice of outstanding electrified, petrol and diesel powertrains,” said outgoing CEO Ralf Speth, who will step down from his post in September this year.The firm is optimistic of further growth in the first quarter of 2020, with the new Land Rover Defender expected to go on sale alongside the facelifted Jaguar F-Type.