Jaguar Land Rover feels strain of computer chip shortage
Luxury car giant Jaguar Land Rover has cut its quarterly losses after a recovery in sales but warned that a shortage of semiconductors is likely to worsen over the next three months.
JLR confirmed that wholesale volumes are likely to be about 50 per cent lower than planned in the next quarter because of the chip supply crunch.
The group, which has its Engine Manufacturing Centre at the i54 north of Wolverhampton, has released figures for its first quarter period to June 30.
It revealed that revenue was £5 billion in the three months, 73.7 per cent higher than the same quarter in the prior year reflecting a 72.6 per cent year-on-year growth in wholesales to 84,442 vehicles.
But it said this was approximately 30,000 units lower than planned due to semiconductor supply constraints, and that the production constraint resulted in a pre-tax loss of £110 million.
Nevertheless, these results represent a significant improvement from the loss of £413 million at the peak of the pandemic in the first quarter a year ago.
JLR said the shortage of semiconductors is presently “very dynamic and difficult to forecast”. But it expects the situation will start to improve in the second half of its financial year.
The company continues to see strong demand for its products for when semiconductor supply ultimately improves.
JLR presently has about 110,000 global retail orders, the highest in its history, representing three months of sales cover, with five months in Europe and four months in the UK. Orders for the Defender, alone, total more than 29,000, representing in excess of four months of demand.
CEO Thierry Bolloré said: “We are pleased to see a continuing positive recovery from the pandemic, with year-on-year growth in all regions, demonstrating the appeal of Jaguar and Land Rover vehicles.
“Though the current environment continues to remain challenging, we will continue to adapt and manage elements that are within our control and ensure that Jaguar Land Rover is well placed to respond to any further market developments.
“We remain encouraged by the sheer strength of the demand for our vehicles, and note the success of our electrified powertrain offering as we work to drive that demand further by reimagining our iconic British brands for a future of modern luxury by design. We have the right vision with Reimagine, and we are already on the journey.”
