JLR to reduce production capacity by 25% - Just Auto
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JLR to reduce production capacity by 25%

01 Mar 2021

Tata-owned Jaguar Land Rover (JLR) is planning to reduce its manufacturing capacity by a quarter over a five-year period to 2027 as part of its latest strategic plan under new CEO Thierry Bollore.

The UK-based premium carmaker also said in a presentation to investors that it has reduced its breakeven point from c.600,000 units pa to c.400,000 units, helped by some GBP6bn of cash and profit improvements under ‘project charge’.

The company also reported an ‘encouraging turnaround’ in China, despite Covid, and said there has been a significant improvement in China business and quality of sales.

Under the ‘reimagine’ strategy, the company is aiming for investment at GBP2.5bn a year and positive cashflow from FY2022/23. By FY2025/26 JLR is targeting an EBIT margin of over 10% compared with around 4% (underlying) in this fiscal year.

There will also be a one-time writedown of GBP1bn this quarter as a result of scrapped projects (such as the XJ). 

JLR is planning an electrified future under the new ‘reimagine’ strategy which includes a new dedicated engineering architecture for BEVs. As well as Jaguar becoming an all-electric brand from 2025, it is planned that Land Rover will welcome six pure electric variants over the next five years.

The company wants all Land Rover models to be available in pure electric form by end of the decade and the first all-electric Land Rover model is planned for launch in 2024. By the end of the decade, in addition to 100% of Jaguar sales, it is anticipated that around 60% of Land Rovers sold will be equipped with zero tailpipe powertrains.