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January 13, 2022

Chip shortage hits JLR Q3 sales

Retail volume was lower across all regions compared to the preceding quarter.

By Graeme Roberts

Jaguar Land Rover said retail sales for the three month period to 31 December 2021  – the automaker’s fiscal third quarter – continued to be constrained by the global semiconductor shortage though it “started to see some improvement in chip supply and wholesale volumes compared to the preceding quarter”.

“Underlying demand for [our] products remains strong and [we have] proactively managed semiconductor supplies to maximise production of higher margin products,” the automaker said in a statement.

Fiscal Q3 retail sales down 13.6% quarter on quarter to 80,126 vehicles and 37.6% year on year.

Retail volume was lower across all regions compared to the preceding quarter, including China (-6.9%), Europe (-6.8%), North America (-11.8%), UK (-24.3%), and ‘overseas’ (-25.4%).

However, wholesale volume was 69,182 units and production volume was 72,184 units in the period (both excluding the China JV), up 8% and 41% respectively quarter on quarter.

“The increase in production in particular reflects a start in improved chip supply,” JLR noted.

Compared to the preceding quarter, Range Rover wholesale volume was up 91.8%, Range Rover Sport by 64.0% and I-Pace EV by 34.5%.

Retail sales for calendar year 2021 were down 1.2% year on year to 420,856 with Land Rover sales up 3.4%.

“Despite the impact of the semiconductor shortage on production and sales, the company continues to see strong demand for its products with global retail orders at record levels,” JLR added.

“The total order book has grown to over 154,000 units, up about 30,000 orders from the prior quarter for the new Range Rover, while demand for the Land Rover Defender remains strong with about 36,000 orders.”

Chief commercial officer Lennard Hoornik said: “We are delighted that positive feedback [for the redesigned Range Rover] at launch has led to a strong order intake for this first, all new, modern, luxury model. The Defender continues to contribute to a record order bank next to our all electric Jaguar I-PACE.

“Semi-conductor supply challenges continue within the industry but our wholesale volumes are improving. We look forward to completing delivery to global customers as supply improves in 2022.”

At the end of January, JLR expects to report unaudited results for fiscal Q3. Initial estimated cashflow for the quarter is around positive GBP150m.

“Looking ahead, the chip shortage remains dynamic and difficult to forecast, however, we expect supply to continue to improve in [fiscal Q4],” the automaker added.

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