Nobody's out of the woods yet, but Jaguar is seeing small signs of light.
The auto industry has taken a beating over the last couple of years, first because of COVID-19 and now because manufacturers simply can't build cars like the Jaguar I-Pace fast enough to meet demand. While nearly all automakers have seen difficulties with a brutal microchip shortage and supply chain issues, the challenges appear to be easing for a few. Jaguar recently reported its first-quarter 2022 sales results, and while the chip shortage is ongoing, the automaker is seeing promising signs of recovery.
Jaguar's overall retail sales fell one percent in the first quarter of 2022, to 79,008 units. However, the good news is that some regions (U.K., U.S., and others) grew. Production volume climbed at the same time, rising to 82,722 vehicles. Wholesale numbers were also down, but Jag's order books remain strong, with 168,000 orders - a 14,000 increase since the end of 2021.
"The successful New Range Rover launch, as well as the momentum gained from Defender, has resulted in a steadily increasing order bank, now at a record 168,000 units," said JLR Chief Commercial Officer Lennard Hoornik. "The customer response to the first deliveries of New Range Rover is strong, and we remain optimistic for the future, despite the geopolitical and macro-economic challenges facing the industry at present," he added.
When we say microchip shortage, we're talking about the chips that power the most popular vehicle functions. Climate settings, audio controls, heated seats, and more all rely on microchips to work. As a result, luxury vehicles like the Jaguar XF use tons of them. When it became clear the COVID-19 pandemic would be a significant disruptor, automakers started canceling chip orders. Demand recovered earlier than most expected, but chipmakers had moved on to making orders for other industries, leaving carmakers in a lurch to find the electronic components needed to build even today's most basic cars.
Jaguar's hardships over the past year are not unique. Nearly every automaker experienced difficulty producing new vehicles, and some shut down for extended periods while waiting on parts. General Motors was hit particularly hard, shuttering production facilities for weeks at a time. The Detroit auto giant has also taken to producing vehicles without popular electronic functions just to get units out the door. Some, such as heated seats and other components, may be able to be installed later on.
An improvement in the microchip situation is good news for Jaguar. The automaker's electrification plans would be ambitious for a large car company, but they're over the top for a company the size of JLR. Jaguar says it will be an EV-only carmaker by 2025, a big jump from its current electric lineup.