Jaguar Land Rover floors the profit pedal for Tata
Jaguar Land Rover has staged a dramatic turnaround in its fortunes, with parent Tata of India reporting a £1.1bn profit in the year to 31 March for its UK auto subsidiary. That contrasts with a bare profit of £14.6m the previous year, and a near-fatal loss of £673m in 2008-09.
During the recession, sales of its large, expensive and thirsty products slumped, and JLR said it would have to close one of its three main UK factories; now the gossip is of the firm having to build a new plant to meet the expansive demands of its next stage of development – a move to build volumes much closer to its titanic German rivals BMW and Mercedes-Benz.
Tata Motors, controlled by the legendary billionaire Ratan Tata, bought JLR from Ford for £1.5bn in 2008. Ford had hardly turned a profit at Jaguar in 20 years and, as the recession bit, it seemed that Tata was fated to an even more distressing financial experience. However, product-led growth and a rapid recovery in demand in markets such as China, India and Russia has helped JLR to turn into a success. The depreciation in sterling of 25 per cent since 2007 has also helped exports, traditionally vital for both brands. JLR's next hit will be the Range Rover Evoque, due in showrooms soon.
JLR's revenues increased by 51 per cent to £9.9bn last year, and sales were up 26 per cent, to 243,621 units. It will create an additional 1,500 jobs at its Halewood plant. Tata is committed to investing £1bn a year at JLR for the next five years.
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