Jaguar Land Rover is staring at a sales ‘hattrick’ it didn’t want
- This may be the third straight year of falling sales for the luxury car maker.
- JLR’s total sales this financial year so far have been lesser compared to the year earlier.
- However, the company is hopeful that new car launches will boost sales in 2020.
Jaguar Land Rover, the British luxury subsidiary of
Tata Motors, has sold less cars this compared to the year earlier, for the third straight time now.
The loss from the British luxury car maker owned by Tata Motors has now widened in four out of the last five years. There were three big reasons for the poor performance, according to a Motilal Oswal report in December 2019.
1. Worsening market conditions in its biggest markets like the UK and China.
2. The product pipeline had more Jaguar cars while Land Rover cars like Evoque had more demand.
3. Dealers losing interest because the deep discounts left less margin on the table.
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The estimate from Goldman Sachs is slightly better but nothing to really cheer about. “We raise our volume forecasts for JLR by 1% and 3% for FY20 and FY21 respectively as we factor in better volume outlook for the Defender — we estimate 50k units in FY21 vs. the previous high of c.22k units in FY16,” a recent report from the global investment bank said.
The impact of Brexit on JLR is getting more pronouncedThe people of the UK voted in favour of exiting the European Union in June 2016, and since then the fortunes of JLR have been declining faster every year. Ralf Speth, CEO, JLR had then famously said that “Brexit
could kill off entire industries”.
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Then, China sprang a surprise Even as it was trying to figure out how to deal with Brexit, the company got another blow with a double digit drop in sales in one of its biggest markets – China. In the second quarter of 2018, China sales numbers were down by 47%. It was also in cost cutting mode, and reportedly axed 4,500 jobs in late 2018.
For the quarter ending December 31, 2018 Tata Sons’ Jaguar Land Rover saw a loss of $3.4 billion following a big write-down in the value of the company.
The third big blow: Donald Trump’s trade war with ChinaEnter 2019, the US-China trade war worsened a global economy that was already showing signs of a slowdown, and
JLR sales continued to fall.
In early February this year, the record losses from JLR also resulted in Tata Motors
stock falling by 17% in a single day. The parent company was also staring at one of the worst slumps in car sales at home too.
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