Jaguar Land Rover has recently reported record sales and a 10 per cent rise in revenues, but this didn't increase the annual profits of the carmaker. On the contrary, annual profits at Jaguar Land Rover have paradoxically fallen 40 per cent.
This year the British automaker's sales increased 13 per cent to 521,571, and it is the first time the company has broken through the half-million sales barrier. JLR said its pre-tax profits fell down considerably a year earlier, primarily reflecting market conditions during the first half of the year, especially in China, model mix and continued investment. JLR booked a $240m charge, largely for US recalls of cars fitted with Takata airbags, and a $230m exceptional item related to the Tianjin Port explosion last year.
The company’s growth in China has been fuelled by sales of larger vehicles, such as Range Rovers, which generally have higher margins than smaller Jaguar cars or other models in the Land Rover series. The domestic popularity of the brand's cars was also rising. Sales in the highly competitive US market, where margins tend to be lower, also rose during the year. Generally Jaguar Land Rover produced and sold this year more cars than at any time in its history. But the company's research and development budget has been smartish ringfenced.
