Jaguar Land Rover's Plan 'B'

Slow sales in China and Europe have hurt Jaguar Land Rover, but it has a plan B ready

- Nachiket Kelkar

The US automobile market hit speed bumps in 2008, even before the recession started. Ford, which was America’s second largest carmaker at that time, was looking to overhaul its operations and it put its British luxury car subsidiary, Jaguar Land Rover (JLR), on the block. Around the same time, half a world away, Tata Motors, India’s largest automobile company, was looking to step up its game in passenger car manufacturing. A year earlier, Tata had launched the Nano, the 1 lakh car. JLR was at the other end of the spectrum, but, Tata went ahead and bought the marquee British brand for $2.3 billion.

The global financial crisis hit in a few months and, as automotive volumes slumped in major markets, Tata Motors made a consolidated loss of 25.05 billion in 2008-09. Over the years, however, chief executive Ralf Speth steered JLR out of the slow lane, and profits soared on the back of successful models like the Range Rover Evoque and the F-Pace, Jaguar’s first SUV. In the financial year ended in March 2018, Tata Motors registered a consolidated net profit of 90.91 billion, much of it coming from JLR.

Things, however, are a bit different 10 months later. Sales have been slipping in China, one of JLR’s major markets. Also, as consumer preference has been shifting from diesel to hybrids and electric vehicles in Europe, JLR has cut production and slashed jobs. In the first half of the current financial year, it reported a loss before tax of £354 million. In the same period a year ago, it had made a profit before tax of £953 million.

In 2018 (January-December), JLR sold 5,92,708 units, down 4.6 per cent from the previous year. In China, sales plunged 22 per cent, in Europe 8 per cent and in the UK 2 per cent. North America, however, bucked the trend, registering a 7 per cent growth. In other markets, sales were up 7 per cent, to 96,844 units.