Luxury carmaker Jaguar Land Rover (JLR) fell to a £501m loss in the fourth quarter, it was announced today, as the coronavirus hammered unit sales.
Before the pandemic hit in the last period, JLR said that it had been on track to hit its financial targets after returning to profit in the second and third quarters.
However, as a result of the final quarter loss, the company reported a pre-tax loss for the year of £422m, on revenue of £23bn.
Due to the pandemic, fourth quarter retail sales were 109,869 units, down 30.9 per cent year-on-year, while full year sales totalled 508,659 vehicles, down 12.1 per cent on 2018/19.
JLR said that its liquidity was “solid”, with £5.6bn, of which it has £3.7 billion of cash, financial deposits and £1.9 billion undrawn credit facility.
It added that it achieved positive cash flow of £225m in the final quarter, due to cost control measures.
Why it’s interesting
The coronavirus forced JLR, which is owned by Indian conglomerate Tata, to shutter its factories in the UK and place 20,000 of its staff on furlough.
During the height of the lockdown, total worldwide sales slumped to 14,709 vehicles in April (down 62.5 per cent year-on-year) and 24,024 in May (down 43.3 per cent).
However, the firm said it was gradually resuming production at the Solihull, Halewood and engine plants in the UK, as well as its Slovakia plant and the contract assembly line in Austria.
Furthermore, it said that positive sales figures from China were encouraging for the firm’s recovery.
Most recently, about 89 per cent of car retailers worldwide are fully or partially open, with the UK’s dealerships and showrooms opening on 1 June.
What JLR said
Chief executive Ralph Speth said: “Jaguar Land Rover’s early action to transform its business meant that as a company we were on track to meet our full-year expectations and operational and financial targets before the pandemic hit in the fourth quarter.
“We also reacted quickly to the disruption caused by Covid-19. Our immediate priority has been the health and wellbeing of our people – and this remains the case as we have now begun the gradual, safe restart of our operations.
“In such uncertain times, I remain convinced that Jaguar Land Rover’s focus on its people, its innovative products and its Destination Zero mission will remain the key to navigating out of this global crisis effectively.
“In China, we are beginning to see recovery in vehicle sales and customers are returning to our showrooms. Our operational fitness gives me confidence that we can weather this storm”.