It’s no secret Jaguar Land Rover (JLR) has been having some troubles lately. Even in the light of slowing sales, poor financial results, and Brexit uncertainty, however, corporate parent Tata Motors is sticking with the British brands.
Natarajan Chandrasekaran, chairman of Tata Motors’s holding company Tata Sons Ltd, told Bloomberg that Jaguar Land Rover isn’t for sale, pushing back on reports the Indian conglomerate was planning on selling the British brands.
He also said the company is open to partnerships but only if Jaguar Land Rover has a say as automotive production is a “core business” for Tata. He added, “From revenue terms, auto is our largest company."
Jaguar Land Rover’s capital expenditure has outpaced its operating cash flow but Chandrasekaran is aiming to reverse that trend by 2021. He said, “Once we do that, then people will believe what I’m saying: I’m not running away.”
This year, Tata Motors wrote down their investment in Jaguar Land Rover by US$3.9 billion (A$5.7 billion).
Of perhaps the greatest concern to Jaguar Land Rover is its performance in the crucial Chinese market. There, in Chandrasekaran’s own words, sales have “collapsed”. Though Chinese car sales have been declining lately, the luxury market overall grew by 8.0 per cent last year. Jaguar Land Rover sales, conversely, fell by 50 per cent.
The blame can be placed squarely on quality control issues plaguing Jaguar Land Rover’s Chinese-built models. Through a joint venture with Chery, the company manufactures the Land Rover Discovery Sport, Range Rover Evoque, Jaguar E-Pace and the Jaguar XEL and XFL sedans, long-wheelbase versions of the XE and XF. These models have suffered a spate of recalls as of late, tarnishing Jaguar Land Rover’s image and forcing dealers to offer sizeable incentives to shift stock.
It’s not just Chinese sales that are a concern. In its most recent quarterly report, Jaguar Land Rover reported its overall global sales were down 11.6 per cent, while revenues declined 2.8 per cent from the same period last year.
Jaguar Land Rover also announced this year it was slashing 4500 jobs, 10 per cent of its global workforce. Late last year, the company pledged to find US$3.2 billion (A$4.68 billion) in cost savings by mid-2020.
Things could be turning around for the British brands, however. Chinese sales have stabilised, while the prospect of a Brexit deal, at long last, will remove some uncertainty.