Jaguar Land Rover's Grades Should Make the Parents Happy
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As Jaguar Land Rover lunges forward with its “Project Charge” turnaround plan, things aren’t nearly as grim as they were a year ago. Which is exactly what the automaker’s parent, Tata Motors, wants to hear.
Despite a softening in global sales, the automaker made progress on many fronts, crediting its cost-cutting and product plan with a return to black ink.
The final quarter of 2019 saw JLR turn in $416 in pre-tax profit — a stark change from Q4 2018, when the automaker reported an operating loss of $357 million. Revenue rose 2.8 percent for the quarter despite a sales decline of 2.3 percent.
All of this should put a smile on the face of Tata, which made clear last year that it wanted to see change in the company. The automaker’s parent company even talked up the idea of finding a partner for JLR.
The automaker credits a rebound in Chinese sales, coupled with a resurgence in interest for certain low-end crossovers, for the showing. The Chinese bounce was no small thing, either. Deliveries in that market, which sank 22 percent in 2018, rose over 24 percent in Q4 2019, with the United States seeing an 11-percent gain.
Globally, the revamped Range Rover Evoque earned a 30-percent increase in sales. The Land Rover Discovery Sport saw its fortunes rise 9.2 percent. Compounding the effect of these two products was growth in sales of the Discovery and Range Rover Sport.
With the cost savings realized under Project Charge resulting in a better balance sheet, JLR plans move into the second phase of the turnaround plan.
“The company’s Project Charge transformation programme reduced operating costs by £154 million, investment by £200 million, and inventories by £405m in the quarter. This brings the total cost and cashflow improvements to £2.9 billion, exceeding the £2.5 billion target three months ahead of schedule,” the automaker said in a release.
“The company has now embarked on ‘Project Charge +’, the next phase of Project Charge, which will primarily target cost savings and deliver a further £1.1 billion of cost and cashflow improvements for a total of £4 billion of improvements by March 2021.”
In the U.S., JLR closed out the year with record sales, despite a cratering of the passenger car market. Regardless of that, the Jaguar brand managed to eke out a 2-percent sales gain in 2019, helped along by added volume from the E-Pace compact crossover, while Land Rover posted a 3-percent hike.
[Image: Jaguar Land Rover]
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