Lockdowns in China push Jaguar owner to £524m loss

CHINA’S strict zero-covid policy pushed Jaguar Land Rover to a half a billion pound loss as a string of lockdowns in the world’s biggest car market hammered production of vehicles.

JLR posted a loss before tax of £524m the first three months of its financial year, up from a loss of £110m a year ago as the carmaker also suffered from a lingering parts shortage.

The loss is more than a quarter higher than the £413m recorded during the three months to June 2020, when much of the world was in the grip of the first Covid lockdowns.

Sales fell to £4.4bn from £5bn a year earlier as JLR missed its targets getting the new Range Rover and Range Rover Sport into production. Deals with semiconductor suppliers and the ramp-up in production of flashier models, such as the new Range Rover, should help sales recover, JLR said.

Semiconductors have become central to car making as they control basic functions such as electric windows, but also the increasingly complex safety features regulators demand, including assisted braking and lane assist.

JLR said it now has a record 200,000

orders to fulfil, or more than six months of production at current rates.

Thierry Bolloré, chief executive of JLR, said: “I am pleased to confirm that we have a completely reinforced organisation setup to respond to the semiconductor crisis.

“This is now starting to recover production growth to achieve greater volumes and will allow us to take advantage of our record order book in the second quarter.”

China’s pursuit of a zero-covid strategy meant more than 40 cities have some form of pandemic restrictions which caused factories to shut down.

JLR counts China as its largest market, with £4.2bn of sales out of a global total of £18bn last year.

JLR’S sales drop comes as the broader UK industry abandoned its ambition of making 1m cars per year by 2023.

The industry now expects to hit that target by 2025 and will make just 866,000 cars this year, 1pc more than in 2021, the worst year since 1956 for car production, according to the Society of Motor Manufacturers and Traders (SMMT). The number of cars rolling off UK production lines in the first six months of the year fell 19pc to 403,131.

June saw a small increase, suggesting the shortage could be easing, according to Mike Hawes, chief executive of the SMMT. He said: “We are beginning to turn the corner, but it’s still volatile.”