Maker of Range Rover Evoque and Jaguar XJ sold 17,152 vehicles in the three months to September into the world’s largest car market
Demand for Jaguar Land Rover cars in China remains strong after the UK manufacturer posted a 58% increase in second quarter sales in the world’s largest car market.
China’s interest in luxury British brands has been the subject of investor disquiet in recent months, with shares in retailers Mulberry and Burberry bearing the brunt, but Asian appetite for JLR products – from the Range Rover Evoque to the Jaguar XJ – appears undimmed. The Indian-owned car maker, which employs 24,000 people in the UK, said it sold 17,152 vehicles in the three months to September. Across the group, JLR sold 84,749 cars, up 29% on the same period last year as pre-tax profits doubled to £431m.
JLR’s chief executive, Ralf Speth, said the company had seen “strong sales across all our key markets.” China is JLR’s third largest market, behind the US and the UK, with the latter also posting a strong performance as sales climbed by more than a fifth. JLR’s Chinese sales growth was slower than the previous quarter, however, when it posted an increase of 86% for the three months to the end of June – a sales spurt that JLR attributed in part to the launch of the Evoque in China.
The performance of the likes of JLR and BMW, which saw the German car maker announce a 40% increase in quarterly Chinese sales this week, contrasts starkly with European mass-market producers. France’s Peugeot-Citroën is being rescued by the French state, while Ford has announced plans to shut three European plants including two in the UK, and General Motors is expected to shut its Bochum site in Germany.
European factories used by Peugeot-Citroën, Ford and GM are focused on meeting demand from a continental market that is in a steep decline, having fallen for the twelfth successive month in September. Premium car makers, by contrast, make fewer vehicles and have the outlet of strong US and emerging market demand.
JLR’s Speth said the company would continue to grow this year. “Jaguar Land Rover will continue to invest in its products, plants and will drive further growth by spending in the region of £2bn this year,” he said. The latest UK investment has seen JLR hire 1,000 more workers to launch a three-shift, 24-hour operation at its Halewood plant on Merseyside. However, JLR’s next major production move will be outside the UK. Speaking to the Guardian in September as JLR launched a new Range Rover built in Solihull, Speth admitted that the company’s production facilities will have to “go where the markets are”, with plans for a Chinese plant now well advanced.
Indian-owned carmaker adds 1,000 jobs at Halewood factory on Merseyside to meet demand for Evoque and Freelander 2
Jaguar Land Rover has moved to 24-hour production at its Merseyside factory to keep up with demand for the Evoque and Freelander, delivering more good news for Britain’s car industry.
The carmaker, owned by Indian company Tata Motors, created a further 1,000 jobs at Halewood with the introduction of a night shift. It takes the factory’s workforce to 4,500 – three times the number working there three years ago. They will work to a three-shift pattern, with the first night shift starting on Monday.
This will reduce the time customers have to wait for new models, such as the Range Rover Evoque and the Land Rover Freelander 2, which are made at the site. Nearly 90,000 Evoques have been sold since the car went into production in July 2011. The model, which has been marketed through a special edition designed in collaboration with Victoria Beckham, is particularly popular in China, where a new elite of entrepreneurs and other businesspeople snap up luxury cars.
More than 80% of the vehicles made at JLR’s three UK factories are exported to China, Brazil and Russia.
More than 30,000 people applied for the 1,000 new jobs. Many of the new recruits have worked trial night shifts. JLR’s human resources director, Des Thurlby, said: “These 1,000 new jobs are further evidence of JLR’s clear ambition for continued growth. We are moving Halewood to three shifts and 24-hour operation to meet increased global demand for our products.
“JLR’s supply chain is also set to benefit, with thousands more jobs expected to be created. Our commitment to expand the Halewood workforce and increase production is great news for JLR, for Merseyside and for the wider UK economy.”When the move was first announced in March, business secretary Vince Cable said it was “further evidence of the strength of the UK automotive sector”.
The carmaker is on course for record profits of about £1.5bn this year from strong demand in emerging markets, although the UK remains its biggest single market. It enjoyed a 45% boom in second-quarter profits worth more than £500m, on a 91% increase in sales to China, it reported last week.
Ralf Speth, the chief executive of JLR, said at the time: “We have a very low market share in China… therefore we are sure we can continue this growth.”
JLR overall sales during the second quarter were 83,452 vehicles, up 34%. That included nearly 72,000 Land Rovers – but fewer than 12,000 Jaguar saloon cars.
Tata bought Jaguar Land Rover from the Ford Motor Company in 2008 for about £1.5bn. After JLR’s comeback from years of struggling the carmaker now employs 24,000 people in Britain. About 8,000 were taken on in the past two years, even before the Halewood move.
The company also wants to build a new engine plant in south Staffordshire that could hire a further 750 workers. JLR has said it will also manufacture a new Jaguar F-type at the Castle Bromwich site in Birmingham.
JLR is one of several automobile success stories in Britain with Japanese carmakers Toyota, Nissan and the BMW-owned Mini business also investing in their UK factories to expand production.
Three years after avoiding government bailout, demand from emerging economies helps carmaker roar back to health
Jaguar Land Rover, a business that was battling for survival three years ago, has reported record annual sales and a 35% increase in pre-tax profits to £1.5bn on the back of booming business in China.
JLR’s Indian owner, the Tata conglomerate, sought a government-guaranteed loan in 2009 and was considering the closure of a plant with the loss of thousands of jobs. However, those plans were abandoned as demand from emerging economies led by China and Russia saw the business come roaring back to health.
JLR revealed on Tuesday that it sold 314,433 cars in the year to 31 March – an increase of 29% on last year – with the Range Rover Sport its biggest seller, followed by the recently launched Range Rover Evoque. The best-selling Jaguar model was the Jaguar XF.
Ralf Speth, JLR’s chief executive, said: “The announcement of JLR’s financial results is a positive reflection of the continued level of consumer confidence in both of our brands. These record earnings, driven by strong product demand and operating efficiencies, give JLR the financial impetus to sustain its ongoing investment programme.”
The results crown another successful month for a UK car manufacturing industry that is overwhelmingly foreign-owned and undergoing an investment boom. On top of production announcements by Nissan, Toyota, BMW and JLR, General Motors announced a fortnight ago it would preserve the Vauxhall plant in Ellesmere Port, saving 2,100 jobs and adding 700 more. Boosted by demand from emerging economies for luxury brands, the British car industry produced 1.34m vehicles last year – an increase of nearly 6% on 2010. While sales of Bentleys, Minis and Ranger Rovers have grown, so has demand for mass-market vehicles such as the Nissan Qashqai, made at Britain’s largest car factory in Sunderland.
China remains a source of exponential growth for JLR, recording a 76% leap in sales to more than 50,000 vehicles, JLR’s third largest market. Russia was its fourth biggest, growing by 38% to more than 16,000 vehicles. The UK is still JLR’s biggest market, but was the slowest grower among the top five countries, increasing sales by 3% to 60,000 vehicles, followed by a resurgent US which recorded a 15% increase to 58,000.
Mark Fulthorpe, an analyst at IHS, said the Range Rover and Land Rover brands were outperforming competitors in old and new markets. “These are positive signs because they are growing their presence in emerging markets and they are proving to have a sustainable business for their vehicles in some of their mature markets.”
Tata bought JLR from Ford in 2008 for a reported $2.3bn and was soon locked in negotiations with the Labour government over a AAA-rated loan guarantee as the credit crunch hit western Europe. At one stage the company considered closing one of its production sites in Solihull or Castle Bromwich in Birmingham, but abandoned those plans and also stepped back from seeking state assistance.
Since then it has announced a series of hefty investments in the UK, including plans to build the new F-type Jaguar convertible at Castle Bromwich, constructing a new engine plant in Wolverhampton with 750 staff and adding 1,000 jobs at the Solihull factory, where it produces the Range Rover, Range Rover Sport, and the Land Rover Discovery and Defender. The Evoque is produced at JLR’s Halewood plant in Liverpool, which recently confirmed plans to hire a further 1,000 workers. Jaguar employs 20,000 people in the UK.
Roger Maddison, national officer of the Unite union, said JLR’s success was “a testament to the hard work and sacrifices of its UK workforce”. He added: “During the 2008 credit crunch the workers agreed to £70 million of savings to support the company through the downturn.”
In the fast lane, premium producers such as JLR, Bentley and Mini – in the slow lane, mass volume producers such as Vauxhall
The two-speed nature of Britain’s car industry was underlined by Jaguar Land Rover this week.
In the fast lane, premium producers such as JLR, Bentley and Mini are booming on the back of demand from emerging market customers in China and India. Hence JLR announcing that the new F-type convertible will be built at its Castle Bromwich plant in Birmingham.
Mass volume producers, meanwhile, are in a tougher market and consequently the axe hangs over Vauxhall’s Ellesmere Port factory on the Wirral. It is unlikely that another big car plant will be built in the UK soon, so the production of new models is vital for sustaining investment and jobs. Toyota’s Burnaston plant in Derby set a good example last year by securing the production of a new hatchback, which could result in up to 1,500 extra jobs at the site.
This is why the F-type is a triumph for JLR employees and why Ellesmere Port desperately needs to secure the contract for the next generation Astra.
Vauxhall is struggling along with other mass volume manufacturers, like Peugeot, Fiat and Renault, because the European market is over capacity to the tune of 1m vehicles – the equivalent of around five factories. A new model win is needed to keep the wolf from the door. If the new Astra model goes to another plant, then Ellesmere Port faces being phased out of action.
The JLR announcement has been greeted, rightly, with a mixture of pride and nostalgia. But the UK government, targeting a doubling of exports by 2020, needs to be rooting for the slightly less glamorous Astra too.
Vince Cable says decision – which will boost area hit by cuts and recession – ‘a vote of confidence in UK manufacturing’
Nissan will build its new compact car at its factory in Sunderland, creating 2,000 jobs and providing a major boost to one of the regions hardest hit by recession and spending cuts, the company says.
The business secretary, Vince Cable, will confirm at the Geneva Motor Show that the Nissan expansion – which will create 400 jobs at the factory and 1,600 more in the supply chain – was underwritten by £9m from the government’s regional growth fund.
He will say: “The decision [from Nissan] is another clear vote of confidence in Britain’s manufacturing industry, and vindicates the government’s decision to put support for manufacturing at the core of its economic strategy.”
The move comes as 2,800 workers at the Vauxhall plant in Ellesmere Port, in the Wirral, await the outcome of a review of General Motors’ European operations that could lead to the closure of the factory.
Cable flew to New York last week to persuade executives at GM, which owns Vauxhall, to keep open the plant, which is one of the region’s biggest employers. But the business secretary told the BBC on Monday he had concerns about the factory’s future. “We have set out a very positive case to them for remaining and indeed expanding their operations in the UK,” he said. “I’m positive, but it is their decision and they haven’t yet made it.”
GM is considering closing at least two factories in Europe, with Ellesmere Port and Bochum, in Germany, understood to be facing the most serious threat. GM is expected to make a decision on Ellesmere Port at the end of the month.
However, Cable hailed improved relations between trade unions and management, as well as co-operation between universities and companies, for enabling the “transformation” of an industry that was in the doldrums in the early 1980s. Nissan’s Sunderland venture, founded in 1986, is widely viewed as a turning point for the UK industry.
“A generation ago, the [UK] automotive sector appeared to be in irreversible decline, beset by strikes and poor management, but today it is a sector transformed,” he said. The unnamed compact car will be unveiled in Geneva on Tuesday.
Nissan’s head of European manufacturing, Trevor Mann, said the move would maintain Sunderland’s position as the UK’s largest car factory. “I’m delighted that Sunderland has secured what will be another very important model for Nissan in Europe,” he said.
“It is a testament to the workforce, the ongoing support from the UK government, and all of our regional partners and suppliers.”
Tommy Brennan, regional official of the GMB union, said: “This is really good news for the north-east and all the suppliers to Nissan where GMB members work. It is a ray of sunshine.”
The number of people employed at the factory, which has benefited from rising demand for cars from emerging economies such as Russia and China, will rise to a new record of more than 6,000.
Last year, the plant hit a production record when 480,000 vehicles rolled out of the facility, where the Qashqai, Juke and Note brands are made.
The Nissan announcement will be welcome news in the north-east, which has been hit hard in the past three years by job losses not just in traditional industries such as steelmaking, but also in the service and public sectors.
Other British car manufacturers are also hiring more workers. Jaguar Land Rover (JLR) is creating a further 1,750 jobs, and Toyota has announced plans for 1,500 new jobs at its plant in Burnaston, Derby.
JLR, Britain’s biggest car industry employer, has said that while it is considering plans to begin manufacturing in China, it will also be creating more jobs in the UK as it responds to increasing demand. Itand will increase production at its plant at Halewood, on Merseyside, where the Range Rover Evoque is made.
JLR is said to be close to a £1.75bn partnership with the Chinese carmaker Chery.
Ralf Speth, JLR’s chief executive, who is in Geneva to promote a new soft-top model of the Evoque and a new Jaguar, tried to allay fears that expansion in Asia would cost British jobs.
He said: “We are expanding like never before, but this is not instead of building in the UK: it is in addition to.”
Speaking in Geneva, the head of Toyota’s European operations, Didier Leroy, played down the impact of a manufacturing glut on the Japanese carmaker. The threat to Ellesmere Port is symptomatic of a capacity problem hitting most manufacturers on the continent, but Leroy said Toyota had no plans to cut back at any of its nine plants, including Burnaston and Deeside, where a total of 3,000 people are employed. “We don’t have any need to make any reform of capacity in Europe. We have absolutely no overcapacity at the European level,” said Leroy, adding that Toyota had already started to overhaul its European operations two years ago.
However, Leroy warned that a slump will hit the industry this year, with pan-European sales expected to fall 5%. “In 2012 we know that the market is very difficult. At the start of the year the western part of Europe is even worse than was planned a few months ago,” said Leroy. Analysts say the decline in sales is leaving mass-volume car makers with too much capacity, amid industry estimates that the major plants are only 80% utilised. Nonetheless, Toyota expects to sell 835,000 cars in Europe this year, including Russia and Turkey, up from 822,000 in 2011.