How JLR hit record revenues in Q4

Jaguar Land Rover received an astonishing £68,000 from each car built and sold in the three months ending 31 December as Range Rover models dominated sales.

The figure was up from an already impressive £61,000 from the previous quarter and reflects the extraordinary juggling JLR has overseen to go about its normal business in the face of chip shortages globally. “This is probably the richest per unit data we’ve had for more than 11 years,” JLR chief financial officer Adrian Mardell said on a call with analysts. The extreme focus on higher-end models didn’t quite push JLR into profitability but the £9 million loss was far better than the massive £302 million loss the company posted the previous quarter ending 31 September.

The focus on high-end models saw Range Rovers (including the Range Rover Sport, Velar and Evoque) account for 56% of wholesales for the three months, compared with 11 percent for Discovery-badged models and 14% for Jaguar models. Even the Land Rover Defender had to take a back seat at 17 percent, compared with 26 percent for the previous three months.

The reason for the bumper quarter in terms of revenue-per-model was twofold, Mardell told investors. First was the need to prioritise cars for the scarce chips and that meant ignoring cheaper models.

Right focus

“We’re consciously not allowing customers to order lowest-value derivatives because they’re the last vehicles to be built and we do not want customers to wait 12 months or more,” said Mardell. “Building the cars that sell quickest and most valuably has worked very well.”

If you wondered how the chip crisis was affecting prices, then there was a big clue. That meant JLR barely built any Jaguar XE or XFs at all, with sales figures showing that the few they did build were all in its China joint venture, meant for Chinese customers.

A huge bias

Second, JLR was switching over production from its outgoing Range Rover to the highly anticipated new version. Mardell said there was a “huge bias” in production for the outgoing model to make sure all customer orders were fulfilled. “That really has lifted the average revenue,” said Mardell. The new Range Rover has yet to filter through in results, although JLR said it has 31,000 orders for the model within its overall 155,000 order backlog amid the chip shortage. Defender is currently at 37,000, up from 33,000 in the previous three months.

JLR production from January to March will be dominated by the Range Rover Sport as the company clears orders for the outgoing version ahead of production of the new one, said Mardell.