12 August 2010

Jaguar & Land Rover Roar Ahead


When Tata bought JLR from Ford in 2008, the consensus was it was a risky, or even foolish, acquisition. After all, they lost more than they made for the previous owner. Fast forward two years and JLR's net profit totalled £221 million in the April-June period, compared with a loss of £64 million the year before. Suddenly everyone realises Tata's purchase was smart both in profits and the profile it has given them. What happened?

Some say sales have picked up and that certainly helped, but even before the recent crash, sales were even higher and yet profit proved patchy at best for Ford. Favourable currency movements have been the main reason I suspect, as JLR have taken the money rather than reduce prices and chase volume for volume's sake. Another reason is new higher end models have been doing very well on the sales front, they being the most profitable.

The LR sales may slow somewhat now that they have been around about a year, but Jaguar is yet to reap the benefits of the the new, outstanding XJ. LR's next big sales injection will come from the new Range Rover Evoque and a refreshed Freelander (including a two wheel drive model), both coming out soon.

The problem for JLR now is getting enough engines from Ford. They could be selling even more vehicles but for this problem. Mind you, the kind of problem most car companies would wish for presently. However, I am I the only one who wonders how company the size of Ford cannot crank out a few more engines for JLR? Hmmm.

The bottom line: JLR are roaring ahead with quality product and a favourable exchange shift.

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