Jaguar Land Rover Profits Will Return To Growth.
New Product Onslaught Will Turn That Around.
Jaguar Land Rover’s (JLR) profits tumbled 26 per cent to $636 million in the latest quarter compared with the same previous period, but Bernstein Research said it is probably only a temporary blip before new models are presented in 2016.
JLR’s latest results were for the third quarter ended December 31, 2015.
JLR sales fell 10 per cent in China, but CEO Ralf Speth was upbeat.
“We are seeing the Chinese volumes coming back and the market stabilising. We are cautiously optimistic about China,” Speth said at a media conference in Mumbai, India, quoted by Reuters.
Bernstein Research agrees with Speth’s sunny outlook.
“Looking ahead we’d argue there are reasons to be positive. JLR is about to cycle through a series of key SUV launches – F-Pace likely in Geneva, new Discovery, L560 Range Rover – which should drive significant growth for the company. China is stabilising and the (Chinese) Chery JV looks now to be functioning properly,” Bernstein Research analyst Robin Zhu said in a report.
The fall in sterling against the dollar will help.
“Pricing concerns in China and the U.S. remain the overarching challenge for JLR, but we’d argue the company can grow volumes and earnings significantly in fiscal 2017 even under conservative estimates for unit profits,” Zhu said.
After the F-Pace and fifth generation Discovery launches, comes the L560 midsize Range Rover which will be positioned between the Range Rover Sport and the Evoque.
“By financial 2017, we’d argue JLR could be selling significantly more than 600,000 units globally. Few, if any other (manufacturers) globally have the same potential to expand scale,” Zhu said.
JLW is owned by Tata Motors of India,