Encouraged by the phenomenal response Jaguar Land Rover has received for the Range Rover Evoque, Tata Motors-owned JLR is ready to launch its next set of products.
The company will announce the launch of the new Range Rover by September 2012, the Jaguar XF Sportbrake by Q4 2012 and the F-type sports car by mid-2013.
After announcing the financial year 2012 results, JLR CFO Kenneth Gregor said on Tuesday: “We are taking the new Range Rover to the next level. It will have a light weight platform. We are continuing to work on new models and concepts.”
In fact, JLR has planned at least 30 new products, product derivatives, engine derivatives or replacements for the next three to five years. However, for the financial year 2012-13, the company has announced a capex plan of £2 billion where roughly £1 billion will be spent on product development and engineering and another £1 billion on enhancing production capacity.
Capacity constraints have caused some loss of volume of its product Freelander, as the company balanced the production to increase the production of the Evoque.
JLR can currently produce 353,000-360,000 units per annum. Now it has also added a third shift at its Halewood and Solihull plants in the United Kingdom to meet higher sales of Evoque, Jaguar XF 2.2 diesel and new product launches.
However, the high share of sales of Evoque in JLR's total sales has also impacted the margins of JLR in the fourth quarter because Evoque is priced lesser than other products of JLR at about £23,706. Q4FY12 margins for JLR stood at 14.6 per cent versus 20.1 per cent margins in Q3 FY12.
Despite Jaguar Land Rover contributing 91 per cent to Tata Motors' profits at Rs 13,517 crore, a rise of 46 per cent year on year, market reacted negatively to the margin decline on Wednesday. Tata Motors stock fell 11.8 per cent on BSE to close at Rs 243.35
Possible slowdown in some of its biggest markets like Europe and China also dampened sentiment on Dalal Street. Yet some analysts give a thumbs-up to JLR's product strategy.
G Chokkalingam, ED & CIO, Centrum Wealth Management says: “Yes there is a concern that the margin has fallen for JLR business by 40 bps but the whole western world is going through a difficult time in terms of moderating GDP growth and that is even the scene in countries like China. But in this environment, management has shifted focus on lower price segment like the Evoque, which has been growing fast. So I don't think it is a big negative.”
In the fourth quarter, JLR sales grew 48.2 per cent to 98,021 units with 14,118 units of Jaguar and 83,903 units of Land Rover.
The forecast by many analysts for JLR sales in financial year 2012-13 is around 15 to 18 per cent.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
