Jaguar Land Rover registers £9m loss as chip shortages extend well into 2022
Jaguar Land Rover has registered a £9m loss in the three months ended 31 January, as a result of ongoing chip shortages that are expected to extend throughout the year.
According to the automotive giant, the situation has somewhat improved compared with the previous three months because of Covid easing in southeast Asia.
Jaguar reported a 1.4 per cent EBIT margin and £164m in free cash flow, while demand reached record highs of 155,000 bookings.
Demand was particularly strong for the New Range Rover, up by 30,000 units.
“Whilst semiconductor supplies have continued to constrain sales this quarter, we continue to see very strong demand for our products underlining the desirability of our vehicles,” said Thierry Bollore, Jaguar Land Rover’s chief executive.
“The global order book is at record levels and has grown an incredible 30,000 units for the New Range Rover before deliveries even start this Quarter.”
Despite a 37.6 per cent slump on 2020 levels, the group is still expecting profits to improve in the fourth quarter with positive cashflow, and is maintaining its financial targets unchanged.
Jaguar’s results come a few days after the Society of Motor Manufacturers and Traders (SMMT) crowned 2021 as the worst year for automotive production since 1956, City PM reported.
Output has in fact fallen 34 per cent on pre-pandemic levels to 860,000 units as a result of supply chain issues.
“The biggest single cause of this is semiconductors, as the average car takes between 1,500 and 3,000 chips. That was the most impactful issue” said SMMT’s chief executive Mike Hawes.
“It did mask other component shortages, with some units still arising from shortages related to Covid and its impact on logistics.”