UK car factories rev back into life
JAGUAR Land Rover underlined the rebound in the British car industry yesterday when it posted a record quarterly profit.
Just three years after it turned to the European Investment Bank for a £340m crisis loan, JLR reported a 57 per cent rise in net profit to £440m for the final three months of 2011.
Demand from China and Russia, as well as the “overwhelming response” to the launch of the Range Rover Evoque sports utility vehicle (SUV), helped JLR to increase car sales 36.7 per cent to 86,322.
This translated into a 40.9 per cent rise in revenue to £3.75bn for the group, which Indian conglomerate Tata bought from Ford for $2.3bn (then £1.15bn) in 2008.
The growth of JLR, now the main profit driver of Tata Motors, reflects the British automotive industry’s climb out of the doldrums.
The sector made 1.34m cars last year, around 70 per cent of its peak in 1972 – when most Brits brought UK-manufactured cars – and well ahead of the 1980s when it produced barely 600,000 a year.
British-made high-end marques such as the Mini and Land Rover are now sought-after signs of affluence among the middle classes of China and former Eastern bloc nations.
The UK also specialises in eco-friendly models and new segments such as the mini SUV, a sector that is dominated by the Nissan Qashqai – the best selling British-produced car.
All of Britain’s most-produced cars are owned by foreign companies. Nissan, Toyota and Honda are Japanese, while the Vauxhall Astra is owned by America’s General Motors.
John Leech, partner at KPMG’s automotive practice, said performance in the British car industry in 2012 would be “a gradually improving story” and pointed to investments in new models and production at JLR and BMW.
Overall Tata Motors, part of the salt-to-software Tata group, posted a 40.5 per cent rise in net profit to 34.06bn rupees for the quarter. Revenue rose 44 per cent to 452.6bn rupees.
Shares in Tata Motors, which the market values at about $15bn, closed up 3.7 per cent at 267.95 rupees.
Meanwhile, JLR chief executive Ralf Speth yesterday said discussions about a joint manufacturing venture with an unnamed Chinese partner – rumoured to be Chery Automobile – are “on track” but he did not elaborate further.