Jaguar Land Rover pauses new models on virus hit

LONDON -- Jaguar Land Rover has paused some of its new model programs to help improve the automaker's finances that have been hit by factory shutdowns and sales stoppages during to the coronavirus pandemic.

"We do have some of our programs on pause," JLR Chief Financial Officer Adrian Mardell said on an earnings call on June 15.

Mardell said there was "no significant change or cancellation" of any programs but said the revised timings of those programs would depend the automaker's ability to improve its financial situation.

"We will come back later in the year once we have figured out the speed of liquidity build and affordability and what that means for those programs on pause," Mardell said.

He said he expected to lift the pauses in the second half of this year.

JLR reported a 422 million pound ($529 million) pretax loss in its 2020 fiscal year that ended March 31 after coronavirus-related factory shutdowns and reduced sales cost it 599 million pounds.

The automaker is already in the middle of a cost-cutting program after a slump in China resulted in a record pretax loss of 3.6 billion pounds during its 2019 financial year.

JLR will reduce capital expenditure to 2.5 billion pounds for the current fiscal year, down from the more than 3 billion pounds it has spent annually in previous years.

JLR expects to save 5 billion pounds in costs by March 2021 as part of its Charge and Charge Plus cost-cutting initiatives, the company said.

The company has previously said it will add another two models to its portfolio by 2024, taking its vehicle range to 16. Possibilities include a compact Land Rover SUV, a compact Jaguar and a lower-riding Range Rover, media reports out of the UK have said.

Next year Jaguar will launch the new full-electric XJ, its first model on the MLA flexible drivetrain platform that will eventually underpin the majority of JLR’s lineup. The company is also close to launching a replacement to the Range Rover flagship model.

JLR is also reviewing how to reposition the Jaguar brand, which has seen demand fall for its traditional sedan models, P B Balaji, finance chief at JLR's parent Tata Motors said in an earnings call in March.

"It's not an easy task. It is very renowned brand with a lot of salience in a lot of markets, yet in some markets it's not as strong as it ought to be," Balaji said.

"The team is focusing squarely on what is the brand positioning of Jaguar and how we are going to make it sharper. And how we ensure the portfolio we have is in sync with that position," he said.

The review is being led JLR's marketing chief Felix Braeutigam.

Sales of all Jaguar models except the I-Pace full-electric SUV have slumped in the first three months, with demand for the XE and XF sedans hit hardest.

The automaker has yet to restart production at its plant in Castle Bromwich, central England, where it builds the Jaguar XF, XE, F-Type sports car and XJ flagship sedan, saying it was "prioritizing the most profitable sales" for its factory restarts.

UK reports say the plant will remain closed until August 10.

JLR warned that the first three months of its current financial year that started in April will be "significantly impacted by COVID-19." It declined to give a performance outlook for the year until "clarity emerges on demand."

China delivered better news for JLR in May with sales up 4.2 percent to 8,068 vehicles compared with the same month last year. The automaker said all its retailers in China were now open.

JLR has also started fulfilling the 22,000 orders it has for the Land Rover Defender.

Deliveries of the highly anticipated SUV started in Europe in May, this month in North America and will begin in China next month.

CORRECTION: An earlier version of this story misstated the date of comments by Tata finance chief P B Balaji.