Jaguar Land Rover (JLR), after revealing the figures for its worst quarterly loss in the fourth quarter of 2018, has said that it’s seeking alternative funding because conditions aren’t right for it to borrow from the bond market, reports Automotive News Europe.
The luxury automaker needs to raise US$1 billion (RM4.07 billion) within 14 months to replace maturing bonds, and at the same time it has to funnel cash into a costly investment programme for electric cars. To support this, JLR could increase a receivables facility or turn to other bank financing, with other options including leasing assets and tapping export credit, treasurer Ben Birgbauer told the publication.
JLR’s owner Tata Motors shocked investors when it recently revealed the extent of the problems its UK arm is having in China. Sales of Jaguar sports cars and Land Rover SUVs dropped 35% in the world’s biggest auto market in the nine months to December 31, 2018, sending the unit to a US$354 million (RM1.442 billion) loss and knocking as much as 30% off Tata stock.
“Market conditions presently are less favourable in general and our bonds are trading below par, reflecting our recent financial performance,” Birgbauer said. “We have always said we monitor the debt market and look to issue debt when market conditions are more favourable.”
JLR recently posted RM17.9 billion in quarterly loss after it took a big write-down in the value of its cars and plants. The move was also part of a steep decline in demand for the automaker’s newest models, and it will also be slashing 4,500 jobs (10% of its workforce) as it responds to slowing sales. That’s on top of the 1,500 people who left the company in 2018. The measures will trigger a one-off charge of US$258 million (over RM1 billion) in the current quarter.
Several other factors contribute to its current predicament: a report by the UK business states that one major problem JLR faces in China is an ineffective dealer network. Only 18% of its outlets are in tier-one cities like Shanghai and Beijing, and more than one-third have been open for three years or less. The company now plans to overhaul the operation, cutting back on deliveries to reduce stock and investing in measures to boost its brand, logo and slogans.
In a conference call with its investors, JLR executives said it’s not possible to predict when China volumes will begin to recover, citing international trade tensions and how much stimulus the state chooses to provide as determining factors. JLR says it can still grow global sales in fiscal 2020 with the help of other markets and the launch of the new Range Rover Evoque.
Another factor concerning JLR’s weakening performance centred on the impact of Brexit, as well as government clampdown on diesel-powered vehicles in the UK, which is directly affecting sales of oil burner cars across brands in the market.
Looking to sell your car? Sell it with Carro.
Lolz! JLR needing rescue? Perhaps they need foreign CEO to manage their brands, oh wai…. I know, why not just sell the brand? Oh yeah, they alredi sold to Tata but still need rescue again. Double lolz!
They shud sell it to some China company, since Mainland brains is proven better than Indian subcontinent or Great Britain colonial overlords. Geely wont be interested cuz got no benefits if Brexit happens, so maybe some random brands like Landwind can buy over JLR. Then nobody can accuse them of celup Range Rover. Triple lolz!
Oso they shud look at their staff as valuable resources instead of throwing them out. Just look at P1 10k workers bringing 15k X70 bookings and waiting list stretching for months. Imagine if those 5k workers JLR fired cud have brought in 5k more orders, then they dun need rescue lor. Lolz lolz lolz lolz!
The BN Cybertrooper is still trying so hard to get some dedak. Sorry bro, we are clean Government now
Ah, the pot-stirrers coming alive :-)
Personally I don’t see how JLR is relevant to Malaysian context. You Pakatan paid trolls just take the cake for trolling without any relevancy. It’s no wonder Semenyih folks heckled you diehards. Doing nothing to move Malaysia forward but spending time on the blogspheres to justify your failings and bootlicking each other.
john are you mental or frustrated?
US$1B?!! P1 100mil yearly funding seem tiny now
The truth is out…..
Pity JLR cause now they got big scandal with their quality issues. All from their China made cars.
Before this, when their cars were made in non China countries, no problem. Now, they have China manufacturing facility, quality jatuh like crazy and until company going bust.
Good lesson for us to learn about China made cars!
Copy paste: “Weak product quality has long been a problem with JLR, the report states, adding that the problem has been around since the time when JLR was still in the hands of Ford. Tata Motors acquired the brand in 2008, but the problem remains.”
Never mentioned that it was anything due to China.
JLR products in the USA are also suffering from poor quality and reliability. Funny how you so fast to link the problems to China without even reading the whole article. I guess a basher will always be a basher.
JLR products in USA is Made In China
JLR cars for US market are made in Solihull UK. Don’t BS here.
Rumours is Great Wall Motors has reached out for initial talks on buy over.
If only they had someone like Vijay Mallya who turned Arrows F1 team into a 4th best team Force India on the F1 grid. Then they can sell it for a profit, like FI was sold and renamed as Racing Point.
Vijay mallya is a wanted man in India for his failed airline…. worst reference ever…
Airlines is a fickle business, many have gone bust and even some established low cost ones like Ryanair is hanging by their teeth. That aside, Vijay’s revival of an F1 team is an excellent case study and how to turn an Indian owned British entity around.
China quality always like that. I think so many gonna cancel their orders for China made cars now!
Jaguar car interior quality dont giv it any justice.
Like this? https://paultan.org/2019/02/18/jlr-told-to-raise-product-quality-to-win-back-clientele/
Lolz!
I saw doug demuro’s review of velar, and its a lemon, the high tech touch sensitive climate controls and infotaiment was not working properly , and he needed to restart the car few times…..
JLR makes Overhyped (by british journos ) ,overpriced and unreliable cars…
jaguar better start focusing more on electric cars…. before the next I4/I5 arrives….
How can it becomes a ‘shock’?
Dont tell me they dont do continuous monitoring and just run the business as usual until end of 2018….
Wow, amazing.
Or they purposedly waited so they can ‘seek’ bigger amount from investor.
Tata mismanagement.
Sell it to the Chinese and watch them turn around and profit.
Landwind shud buy it, then no problem for them to celup Range Rover.
Lol….China businesses are dying too, no thanks Trump. Why do you think these Range Rovers and Jags are doing badly in the first place? Trump is squeezing China where it hurts most and Xi is clueless on how to counter him.
Lolz! JLR needing rescue? Perhaps they need foreign CEO to manage their brands, oh wai…. I know, why not just sell the brand? Oh yeah, they alredi sold to Tata but still need rescue again. Double lolz!
They shud sell it to some China company, since Mainland brains is proven better than Tata or Great Britain colonial overlords. Geely wont be interested cuz got no benefits if Brexit happens, so maybe some random brands like Landwind can buy over JLR. Then nobody can accuse them of celup Range Rover. Triple lolz!
Oso they shud look at their staff as valuable resources instead of throwing them out. Just look at P1 10k workers bringing 15k X70 bookings and waiting list stretching for months. Imagine if those 5k workers JLR fired cud have brought in 5k more orders, then they dun need rescue lor. Lolz lolz lolz lolz!
*Double post.
LMAO – Mainland brains better than Tata or Great Britain colonial overlords? What have you been smoking lately?
GB brains – ran JLR to the ground. Need TATA rescue.
TATA brains – soon to run JLR to the ground.
Geely brains – making Volvo Cars great again.
Copy paste: “Sell it to the Chinese and watch them turn around and profit.”
Better outsource our Government departments to China. they can increase productivity 10 fold
Agree on outsourcing to China. We can be assured they aren’t using fake degrees and fake certs.
I think Proton X70 sales going to go down the drain!
You’re right… in your dream world. Reality tells us otherwise.
lousy interior, unreliable and outdated engines, crazy prices (malaysia at least, always premium over merc and bmw)…sure mati lah
Not surprised if looking at their cars price tags, quality of products and service provided. LOL
Well as predicted. The lux market is big. But rich people cannot tahan with JLR quality issue. More n more problem start to surface. Beli baru 2 tahun compressor sudah kong. 3 tahun engine kong. 4 tahun gear box kong. Crazy la u igt bli RR mahal suka masuk workshop ka. For u guys bli RR grey import hehehe gud luck ready cash byk2. Make sure u ada medical card, mesti pengsan after u tgk bill.
Sounds like China made cars and their quality!….lolz!
But RR is made in Britian. Orz!