Jaguar Land Rover saw its investment in new technology and product launches pay off this week as the company reported record profits of £1.67bn.
The UK-based premium car manufacturer said its pre-tax annual profits were up 11 per cent in 2012 and reported record sales (up 22 per cent) and revenues (up 17 per cent), driven by growth in all regions including a 48 per cent increase in China.
The firm pointed to the launch of its all-aluminium Range Rover and several Jaguar models including the new F-Type as a major factor in the growth that has outstripped even the strong performance by the rest of the UK’s automotive sector in the last year.
‘The positive result for the financial year demonstrates that we have strong demand for our great, solid product portfolio all around the world,’ said JLR CEO Dr Ralf Speth, in a statement.
‘Jaguar Land Rover invested significantly in the product creation process, in our advanced manufacturing sites and created more than 3,000 jobs.
‘This commitment is set to continue with a sustained programme of investment which will see us spend in the region of £2.75bn on new product, people and infrastructure in the year to March 2014.’
Phil Harrold, a partner at PwC’s automotive practice, said JLR had seen significantly above average growth in most markets, particularly in Europe where sales had risen by 18 per cent compared to general sales that only began rising in April after a 18-month slump.
‘BMW have put out warnings that they’re going to have a tough year and they’re in the same premium segment as JLR, so even within that executive end of the market you’re finding people struggling,’ he told The Engineer.
This was partly due to the company’s investment in research and development, he added. ‘But don’t underestimate the marketing side of it. The classic example of that is the Evoque small off-roader: it’s not that technically different from others in the stable but in terms of the sheer marketing attractiveness it really has been quite phenomenal.’
JLR’s UK sales were up 20 per cent, leading a resurgent UK car market that was almost 15 per cent bigger in April than it was in the same month last year. Car manufacturing output in the UK has grown by a similar amount.
JLR sales in North America have also risen nine per cent – above market average – while growth in China reached 48 per cent, despite a reported slowdown in the Chinese appetite for luxury goods.
‘The slowdown is in growth not sales,’ said Harrold. ‘The Chinese economy is still growing at eight per cent a year. Whilst the economy might slow a bit, you’re still looking at a brand that’s growing massively above that. So it’s not just economic growth: it’s something around the brand image, the decision to buy British.’
JLR last year announced it was building a factory in China to help meet growing demand, but Harrold said that international growth met by foreign plants would still benefit the UK manufacturing sector.
‘They’re moving to foreign-based assembly. But everything else will be delivered in as a component. So although you have an assembly plant in China, it could well be that some of the parts come from the UK.’