For the first time in 2020, Jaguar Land Rover has posted a profit despite the global pandemic.
Last year, Jaguar Land Rover recorded major financial losses a result of falling sales in China. And then the global pandemic happened. Despite this, Jaguar Land Rover is making a remarkable recovery. Earlier this month, Jaguar Land Rover announced its global sales had increased in fiscal Q1 (April-June 2020) by 53.3 percent with 113,569 vehicles sold since production factories and the majority of dealers reopened. Now, the automaker has released its financial results for the three months ending 30 September 2020, and there are signs of encouragement.
Overall revenue in fiscal Q2 was £4.4 billion ($5.6 billion), an increase of 52.2 percent compared to fiscal Q1, but down by 28.5 percent from the same period last year.
Jaguar Land Rover also recorded a £65 million ($84 million) pre-tax profit, compared to a loss of £413 million ($534 million) in the previous quarter this year. This was still lower than last year's fiscal Q2 results, however, when the company recorded a pre-tax profit of £156 million ($201 million).
Jaguar Land Rover's return to profit was achieved thanks to "the recovery in sales, Project Charge+ cost efficiencies and favorable foreign exchange impact." The manufacturer saved £0.6 billion ($775 million) as part of Project Charge+ transformation program. As a result, Jaguar is confident it will generate savings of £2.5 billion ($3.2 billion) for the full year ending 31 March 2021.
"We were pleased to see sales, profitability and cash flow significantly improve in Fiscal Q2 from the prior quarter. While sales and profitability have not fully recovered to pre-pandemic levels in most markets, it was particularly encouraging to see China sales up year-on-year and global sales of the new Land Rover Defender starting to ramp up," said Adrian Mardell, Chief Financial Officer at Jaguar Land Rover.
The automaker also expects sales to further improve with the upcoming launch of the Land Rover Defender and updated versions of the Range Rover Velar and Jaguar F-Pace, E-Pace, XE, and XF. A new plug-in hybrid and two more mild-hybrid models are also expected to debut before the end of the year.