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Last Updated : Feb 11, 2020 08:33 AM IST | Source: Moneycontrol.com

Coronavirus outbreak: Jaguar Land Rover’s China best-seller launch may be affected

The UK-headquartered luxury auto brand has nearly canceled a formal physical presentation of the SUV in the wake of the outbreak of the deadly virus

 
 
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The all-new Land Rover Discovery Sport that makes up half of CJLR’s (China joint venture of JLR) business will be tested when the best-seller hit showrooms after parent Tata Motors warned that the lethal coronavirus would most certainly impact financials of the on-going quarter.

The UK-headquartered luxury auto brand has nearly cancelled a formal physical presentation of the SUV in the wake of the outbreak of the deadly virus and has instead decided to go for a virtual online launch. A decision, however, has not yet been finally made, a top company executive informed.

Speaking to analysts Adrian Mardell, Chief Financial Officer - Jaguar Land Rover Automotive plc, said, “The virus will certainly impact Q4 results. To what extent, we'll know over the coming weeks.”

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Though retail JLR volumes in China picked up in January, the spread of the coronavirus and counter measures taken by the authorities including imposition of restricted movements have crippled demand in the last few weeks.

JLR’s plant in Changshu remained shut though the official holidays are long over and workers were expected to restart production at the plant. “JLR China & CJLR staff will return to work in accordance with government guidance”, the British brands stated in a presentation.

The company further warned that, if the disruption in production continued, it could hit supply chains outside of China as well. “Expect Q4 sales to be impacted but too early to quantify and if disruption continues, supply chains outside China could also be impacted,” the presentation further added.

In the December quarter JLR wholesales in China jumped 36 percent to 12,300 units, outperforming all other markets. CJLR wholesale also jumped 34 percent to 15,400 units. Retail volumes were also up 24 percent to 27,400 units during the quarter as compared to the same quarter last year.

“The Discovery Sport is due to go on sale on February 20. It's half the volume for the CJLR business. Of course, with the sad event in China at the moment, that launch will be impacted. We're thinking about doing as a virtual online launch rather than a physical presentation initiative which we normally do, but that decision has yet not been finally made,” added Mardell.

China made up 17 percent of the JLR’s worldwide sales by the end of December while the US remained the biggest market for the two brands with a share of nearly 29 percent.

By the end of December the China JV business recorded a loss of 49 million Pound, which was higher than the 31 million Pound loss recorded during the same quarter in FY19.

A statement released towards the end of January stated that the JV had made a donation of RMB 8 million ‘for the control of the new coronavirus pneumonia and the future prevention of epidemic diseases at primary and middle schools’.

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First Published on Feb 11, 2020 08:33 am
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