JLR reports 68% increase in retail sales in June quarter at 1,24,537 units
However, wholesales, in particular, were lower than demand would have permitted due to semiconductor supply issues affecting the global auto industry, JLR noted in a statement.
Retails were higher year on year in every key region including in the UK, Europe, North America, and China, it added.
“We are pleased to see the gradual economic recovery from the pandemic with customers returning to our showrooms driving double-digit year-on-year sales growth in all regions, demonstrating the continuing appeal of Jaguar and Land Rover vehicles. While the present semiconductor supply shortages continue to be a challenge for the industry, we are encouraged by the strong demand we see for our vehicles,” JLR Chief Executive Officer Thierry Bollore noted.
Looking ahead, the chip shortage is presently very dynamic and difficult to forecast, the company said.
Based on recent input from suppliers, the automaker now expects chip supply shortages in the second quarter ended September 2021, to be greater than in the first quarter, potentially resulting in wholesale volumes about 50 per cent lower than planned, it added.
“We expect the situation will start to improve in the second half of our financial year. However, the broader underlying structural capacity issues will only be resolved as supplier investment in new capacities comes online over the next 12-18 months and so we expect some level of shortages will continue through to the end of the year and beyond, ” JLR said.
While the present supply constraints continue, the company will continue to prioritise production of higher-margin vehicles for the chip supply, it added.
“In the scenario above, we expect an operating cash outflow of about £1 billion with a negative EBIT (Earnings before interest and taxes) margin in the second quarter and a substantial improvement in underlying* operating cash flow in the second half of the financial year as chip supply improves,” the automaker noted.
The company continues to see strong demand for its products and currently has about 1,10,000 global retail orders, the highest in the history of the company, representing three months of sales cover, with five months in Europe and four months in the UK, it added.
Orders for the Defender alone total over 29,000, representing over four months cover, it said.
“The present semiconductor supply issues represent a significant near-term challenge for the industry which will take time to work through but we are encouraged by the strong demand we see for when supply recovers. We are taking strong steps to ensure the security of our supply chain for the future, working with our suppliers and chip manufacturers directly to increase the visibility and control over the chip supply for our vehicles,” Bollore noted.
Total liquidity at the end of the first quarter stood at £5.6 billion including a £1.9 billion undrawn committed credit facility (
), the automaker said.
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