Pensions deal boost Jaguar Land Rover profits
A one-off pension boost has helped boost profits at Jaguar Land Rover despite heavy costs from launching new vehicles and expanding its factories.
The West Midlands-based luxury car company, which makes its engines on the i54 site beside the M54 at Wolverhampton, also revealed lower wholesale volumes everywhere but at its Chinese joint venture business, as it supplied fewer cars to dealerships around the world.
In the first three months of its financial year, to the end of June, revenue was £5.6 billion, up £244 million on the same period last year.
Profit before tax was £595m, up from £399m a year ago. But it included a £437m one-off credit relating to recent changes to its defined benefit pension plans, intended to make them more affordable for the company.
Profits were also hit by continuing costs of launching new models and growing the business as well as the seasonal dip in sales compared to the previous three months.
JLR chief executive Ralf Speth said: "The foundation of our journey of sustainable, profitable growth continues to be our investment in products, plants and people as we become a technology-driven company.
"We continue to deliver rising volumes and revenues across the business, reflecting strong demand for new models such as the Range Rover Velar and established global award winners such as Jaguar F-Pace.”
Retail sales to customers over the three months were up 3.5 per cent to 137,463 vehicles, led by the best-selling Jaguar F-Pace which has done well everywhere since its launch last year. The company said there was also continuing strong demand for well-established models such as the flagship Range Rover and Jaguar XF executive saloon, in particular the newly launched long wheelbase version of the Jag made for the Chinese market.
While sales were up 30 per cent in China, and up 16 per cent in North America over the three months, they remained flat in Europe and fell 14 per cent in the UK, partly blamed on the timing of the hike in Vehicle Excise Duty in April.
Jaguar Land Rover, owned by India's Tata Motors, also said it was having to continue offering higher incentives to win customers as competition intensifies. In its annual report, published last month, the group's chief financial officer Kenneth Gregor warned JLR expects the incentive and cost pressures on profit margins to continue in the current financial year.
