A few days ago, the British luxury car manufacturer Jaguar Land Rover announced the third quarter of the 2019/20 fiscal year (October-December 2019) financial report, following the second quarter financial report, Jaguar Land Rover once again achieved revenue and profit growth.
According to the financial report data, Jaguar Land Rover’s operating income in the fiscal quarter increased by 2.8% year-on-year, reaching 6.40 billion pounds, and the pre-tax profit margin was 3.3%. It is expected to achieve a 3% profit forecast for the full fiscal year. Among them, the Chinese market continued to make efforts. In the third fiscal quarter, the sales volume in the Chinese market increased by 24.3% year-on-year, and the profitability of dealers continued to improve. At the same time, since July, Jaguar Land Rover’s sales in China have achieved double-digit year-on-year growth for six consecutive months. From the perspective of product performance, the new generation of Land Rover Range Rover Evoque is very popular in the global market. Sales increased by 30%, and the Land Rover
Achieve the goal of reducing costs and increasing efficiency in advance, aiming at the future market
In the quarter, Jaguar Land Rover achieved pre-tax earnings of £318 million, EBIT (earnings before interest and tax) of 3.3%, EBITDA (earnings before interest, tax, depreciation and amortisation) of 10.8%, cash flow was a net outflow of £144 million, an improvement of £217 million on the same period last year, and sufficient cash flow, including £3.90 billion in cash and £1.90 billion in undrawn credit lines, totaling £5.80 billion.

By the end of the quarter, Jaguar Land Rover’s Project Charge had achieved its full-year operating performance improvement target of £2.90 billion ahead of schedule. Further to this, Jaguar Land Rover announced the launch of an enhanced Project Charge +, adding an additional £1.10 billion of operating performance improvement plans, with the aim of achieving the overall target of £4 billion by the end of the fiscal year (end of March this year).
"In the luxury car market, Jaguar Land Rover took the lead in making decisions to reduce costs and increase efficiency, facing market challenges head-on. The effective implementation of the cost reduction and efficiency increase actions has contributed to the further improvement of global performance." Regarding the results of the cost reduction and efficiency improvement plan in this quarter’s earnings report, Prof. Sir Ralf Speth, Jaguar Land Rover’s global CEO, said: "Thanks to the continuous business operation changes, Jaguar Land Rover continues to achieve double growth in revenue and profitability. Although the automotive market as a whole still faces many challenges, our excellent performance in the Chinese market and the excellent performance of the new generation of Land Rover Range Rover Evoque give us full confidence. At the same time, our improving financial position and the achievements of our cost reduction and efficiency actions will be a solid guarantee for JLR to bring even more exciting products and technologies to the market. "
In the face of the turbulent car market, reducing costs and increasing efficiency is just a phased strategy for Jaguar Land Rover to maintain steady progress, and in order to achieve more long-term growth, formulating long-term and market-expected strategic actions in terms of vehicle electrification and intelligence has become Jaguar Land Rover’s "highlight", and product transformation in response to trends such as electrification and intelligence is underway.

Jaguar Land Rover’s innovative Product Design Engineering Centre, the UK’s largest automotive design and development facility, has been inaugurated in Gaydon, Warwickshire. The centre is an important part of Jaguar Road’s corporate vision to achieve "Destination Zero". "We will continue to maintain a strong product offensive, strengthen our exploration and development in the field of vehicle electrification, and strive to create a future development vision of’zero emissions, zero accidents and zero congestion ‘," said Prof. Sir Ralf Speth, Jaguar Land Rover’s global CEO.
From 2020, all new models of Jaguar Land Rover will be available in electric models, including pure electric, plug-in hybrid and mild hybrid models. Jaguar Land Rover currently has a variety of models such as the pure electric luxury SUV Jaguar I-PACE, the Range Rover Sport PHEV (plug-in hybrid) model, and the all-new Range Rover Evoque with 48V light hybrid system. Jaguar’s flagship model XJ Next Generation will also launch a new pure electric version.
In terms of intelligence, Jaguar Land Rover is working with the UK Autodrive Alliance in the UK to develop the next generation of autonomous driving technology. At present, the Range Rover autonomous vehicle has completed a number of tests such as automatic identification lights, handling dangerous road conditions, and automatic parking. At the same time, China is also an important part of the global research and development of Jaguar Land Rover’s autonomous driving technology. Jaguar Land Rover has a special team to study the implementation of autonomous driving suitable for China to ensure the practicality and reliability of the technology.
Sales in China have been growing at double digits for six consecutive months
In early 2019, in the face of a challenging market and many uncertainties brought about by global geopolitics, Jaguar Land Rover took the lead in proposing "never to pay the price of blood in exchange for a single volume growth", setting the core goal for the development of the Chinese market throughout the year. Despite the continued cold winter in the domestic auto market, Jaguar Land Rover was still able to buck the trend and return to the growth channel. Since July, the dealer network has achieved an average profit, and sales in China have also achieved double-digit year-on-year growth for six consecutive months, of which December increased by 26.3% year-on-year.
China is the most important single market for Jaguar Land Rover in the world. Since the beginning of this year, Jaguar Land Rover has taken the lead in proposing a three-step strategy of "stabilizing the situation, restoring confidence, and gradually improving" in China, with the aim of improving the profitability of dealers as the general direction for the whole year. By strengthening branding and improving product capabilities, transparent management and open source, it will actively deal with the adverse impact of the overall market environment.
In 2019, Jaguar Land Rover has always regarded improving the profitability of dealers and ensuring their healthy operations as the first goal. First, it does not blindly pursue sales targets and promotes dealers to take the initiative to improve the quality of development; secondly, it optimizes some business policies and processes more simplified, focused and transparent, and increases the convenience and transparency of information inquiry, so that dealers can understand the manufacturer’s product sales strategy more timely and accurately; finally, it helps dealers make various advanced predictions, maximize the use of policies, and ensure that dealers get rebates. At the end of 2018, Jaguar Land Rover’s inventory depth was 2.2, and by the end of 2019, it had dropped to a healthy level of 1.5, which laid a solid foundation for Jaguar Land Rover to achieve double growth in revenue and profit in the second and third fiscal quarters of the world.
While working with dealer partners to actively build system strength, restore confidence, and achieve growth, Jaguar Land Rover maintains its investment in branding and product improvement. The new generation of Range Rover Evoque and the new Jaguar XEL are well-deserved blockbuster products of Jaguar Land Rover in 2019. At the Jaguar Land Rover Product Day event held for the first time in September, the "Jaguar Track Year" representative model Jaguar F-PACE flag version, the new Range Rover Sport that has attracted much attention from consumers, and the new models of Jaguar Land Rover’s luxury high-performance sub-brand SV were also presented to the public. At the same time, the Jaguar Track Year and Land Rover All-Terrain Year activities throughout the year have penetrated Chinese consumers with hundreds of regional experience activities, further solidifying the influence foundation of the British dual brands.

"Double growth" reflects Jaguar Land Rover’s response to market cyclical challenges, through product layout to dealer improvement, and then system innovation to enable the brand to win in the complex car market environment, and then achieve the goal of long-term growth. The hot sales of the new generation of Land Rover Range Rover Evoque and Land Rover Range Rover Sport also point out the direction for Jaguar Land Rover to seize the opportunity of the formation of the endogenous order in the market and achieve long-term growth of the enterprise, that is, to continuously strengthen the product matrix.
The new generation of Land Rover Defender, which debuted at the Frankfurt Motor Show in September last year, sets the benchmark in the global market with a new appearance, unchanged tough guy temperament, technology that embraces intelligent digitalization in the 21st century, and rich personalized configurations. Once the new generation of Land Rover Defender was unveiled, it has attracted high attention from consumers around the world, especially the loyal fans of Land Rover Defender; the new car is expected to be delivered to the first customers around the world this spring. The new Jaguar F-TYPE, a two-seat sports sedan with integrated Jaguar design DNA, was released in December last year as an important part of Jaguar Land Rover’s product matrix, and has also won a good response in the market. The pure electric Jaguar I-PACE won the 2019 European "Golden Steering Award for Best Mid-Size SUV" in November last year.
A decade is a node, but also a new beginning
2020 is the tenth year of Jaguar Land Rover’s entry into China, and it is also the beginning of a new chapter in Jaguar Land Rover’s development in China. Therefore, the "stabilizing and upward" in 2019 is more strategic for Jaguar Land Rover’s development in China. In 2020, Jaguar Land Rover will continue to deepen changes and strive to achieve greater success in the new market competition. Looking at the development of the next decade, Jaguar Land Rover not only regards China as the most important single market in the world, but also strives to build China into a strategic core base for global development in the future, covering innovative R & D, production, sales and procurement.

In this regard, Mr. Pan Qing, Global Director of Jaguar Land Rover and President of Jaguar Land Rover China, said: "The continuous building of system strength in China has brought more confidence and energy to Jaguar Land Rover’s upward development. The turn of 2019 and 2020 not only ends the first decade of Jaguar Land Rover’s development in China, but also opens a new starting point for another new decade. We must strive to achieve the same resonance between the energy of the Chinese market and Jaguar Land Rover’s global layout."
In the past few years, China has become the world’s largest auto market, and also has the world’s largest luxury car consumers. Every year, more than a quarter of the world’s luxury cars are bought by Chinese consumers. In the cold winter of the car market in 2019, luxury brands still maintained stable sales in China, and Jaguar Land Rover firmly believes that there is still a lot of potential in China’s luxury car market. Jaguar Land Rover has been deeply studying Chinese consumers’ demand for luxury models throughout the global R & D process. For example, the localization of products is not a simple model lengthening. Jaguar Land Rover attaches great importance to the high requirements of Chinese consumers for the air quality in the car. In the selection of seat materials, it has carefully selected materials that are helpful to the air quality in the car, and worked hard on the details.
For the new year, Jaguar Land Rover in China will focus on quality improvement, system consolidation, cost optimization, product innovation and other new measures. First, not only the improvement of product quality, Jaguar Land Rover will continue the positive development trend of its sales system in 2019, improve sales quality, and work together in both quality and quantity; secondly, continue to improve and stabilize system capabilities, including system improvement, new management concepts, and personnel screening and training. At the same time, on the basis of the global Project Charge & Accelerate, promote the integration and optimization of resources in China. Finally, in the process of continuous product innovation and localization, Jaguar Land Rover will continue to optimize product characteristics around the Chinese market, including integrating Chinese customers’ preferences for luxury products into the R & D process, and cooperating with local technology innovation enterprises to continuously update products, making products more dynamic, so as to adapt to the Chinese market.
(Editor in charge: He Yihua HN110)
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