Okay ladies and gents, let's stop cocking about, as three over the hill public school boys might say, and lay out the facts, as opposed to that financial reporting above, that would make Enron and Arthur Andersen blush, or for younger readers, Autonomy and Deloitte.
First, the Jaguar brand is not even profitable, never mind making the equivalent of over £10,000 profit per unit. How do we know? A JLR exec told a well-regarded auto industry analyst. Basically the JLR 'Deepthroat' said Jaguar was a loss maker, and the XE was Jaguar's last chance:
'but, as CAR Magazine’s Editor, Phil McNamara, pointed out ‘BMW sells twice as many cars in the UK alone [and] the Jaguar brand remains loss-making.’ Interestingly, in researching his article, McNamara contacted high-profile Automotive Industry Analyst Max Warburton of Bernstein Research in Singapore – Warburton quoted ‘a JLR executive’ as telling him ‘Jaguar is not viable at 60,000 units. This is Jaguar’s last chance – if X760 fails, that will probably be the end for the brand.’'
http://www.aronline.co.uk/blogs/news/jaguar-land-rover/news-analysis-tata-motors-issues-india/
Hmm. So we know for a fact from the horse's mouth that one half of JLR isn't even profitable, but we're to believe that the other half is making unheard of within the industry profit margin to compensate for the whole outfit.
Staying with Jaguar, we know that:
1. the re-skinned S-type XF is nearly 7 yrs old, or actually 16 yrs old underneath; that it is massively outsold by the German 3, as well as by Infiniti, Lexus and Cadillac probably; that it is being massively discounted to compensate for its age, general crapness, and the fact that it 'failed' EuroNcap - twice, etc. etc., so has to be a money loser
2. the re-skinned 2003-XJ XJ is 5 yrs old in July, or actually 11 yrs old underneath; that it is insignificant in sales terms, with the ultra dominant S-Class outselling the 7-series and A8 combined, at ~100k units/yr, whereas the XJ is probably 15k/yr at very best
3. the 'new' F-type, actually cut and shut 8yr old 2006 XK, is stinking up dealer parking lots in its no.1 target market, the US, as Wolfgang helpfully showed just this week, where the 'hot new' F-type is sitting unsold for on average nearly 6 months.
April's Slowest-Selling Cars
2014 BMW 640i xDrive coupe: 205 days
2014 Mercedes-Benz E400 Hybrid: 179 days
2014 Jaguar F-Type convertible: 157 days
2014 Infiniti Q60 coupe: 157 days
2014 BMW M6 convertible: 143 days
2014 Mitsubishi Outlander: 141 days
2014 Jaguar F-Type S convertible: 140 days
2014 Acura RLX: 135 days
2014 BMW 650i xDrive Gran Coupe: 133 days
2014 Mini Paceman: 129 days
http://www.benzinsider.com/2014/05/the-slowest-selling-car-of-mercedes-benz/
credit: Wolfgang - 'well-known' forum member
So that's Jaguar, loss-making and with zip prospect of improving matters, given that the XF and XJ have to soldier on for at least 2 more years, against a revised A6, brand new E-Class, 5-series and 7-series all in the meantime.
So Land Rover. This must be where the huge profits are being made, right? Er, no.
1. the Defender is not only being chopped in a year or so, but its sales are now so small, around 15k/yr genuine, that it is irrelevant, and all its main components, engine, gearbox etc, are bought in, minimising profit margin potential.
2. Freelander/LR2 also due for the chop in a year or so, so on run-out at dealer, with big discounting, and again all major components bought in, form Ford, Aisin, Getrag, etc..
3, Discovery/LR3 stumbling along in its 10th year, after countless 'facelifts'. who knows what it really sells, maybe 25k/yr tops, but again all powertrain bought in and not cheap to make, given its 'double chassis' and outdatedness generally.
4. Evoque if judging by the UK alone one would think this was a massive money-spinner, but outside of UK the locals don't seem as impressed as the British by this 'icon'. China loves German cars above all, with the X3, Q3, Q5 and so on cornering the market for mid-size premium SUVs. The Macan is sold out into 2015 already and outside of the UK discounting on the greatly overpriced Evoque is common, cutting into any once thick profit margins on this product.
5. that basically leaves the 'new' Range Rover twins. Granted, in their first/second year of being on-sale they'll be enough numpties to fall for these things, before the reality of the breakdowns, plummeting residuals - outside of Essex and Cheshire, UK - etc kicks in, as is typical with L/Rover products, so the roughly 70k units/yr combined JLR makes of these could be spinning around £10k profit per unit, or around 15% margin, so over half a billion in profit on these alone.
So, let's tot it up. Jaguar = loss-making, to what extent is unknown, but say, a few grand per unit, so around £200 m in total;
Defender, Freelander and Discovery are probably profit neutral, given that the sales of the Defender are small to begin with, and the Freelander and Disco so old that they have to be heavily dicounted against the likes of the X3, Q5, Jeep Grand Cherokee, etc., so basically nothing;
Evoque, at around 100k units/yr and say £3k per unit profit, now that the initial sales hype has died down, going into its 4th year on sale, and the Macan creaming off the most profitable £50k+ orders, that gives around £300 m in total profit;
leaving a grand total of around £700 m.
From that you then have to/should subtract spend on R&D, which according to Tata-JLR is running at around £2.5 bn a year, so for assumption sake of no carry over cash pile at the start of the year, JLR would have around £700 m from profit on current year sales minus expenditure on new product development as the main item, a large part of the £2.5 bn R&D figure, so around £1.5 bn minimum negative income at the the end of the year.
Maybe now we can see why JLR does not/can not afford to even commission a separate engine block for a new engine, or spend the several billion pounds it would take to do a real 3-Series rival programme, from 'clean sheet', rather than the barely 24 month* cut and shut 2003 XJ platform that will be the new XE.
* Autocar believed/was briefed that the 'Baby Jag'/BMW 3-series rival would be FWD, all the way through 2012, suggesting strongly that the X760 'XE' programme was/is a quickly cobbled together, make-do thing, off the back of the XJ/F-type platform, and not all new, from the ground up as professed, as such a thing takes a minimum of 4 years in the auto industry, more typically five years, for example something like the all-new 'MRA'-platformed W205 C-Class.
http://www.autocar.co.uk/car-news/new-cars/jaguars-crucial-baby-saloon
http://www.autocar.co.uk/car-news/jaguar-f-type/f-type-leads-four-car-jag-model-offensive
http://www.autocar.co.uk/car-news/new-cars/jaguars-baby-saloon-next-priority
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Anyhoo, just my 2 cents, but I'll guarantee it's far closer to the truth than the joke that is that thing that passes for a windowdressing financial report above, that as I said would put Enron and its Arthur Andersen auditors to shame.
. It maybe difficult to hold the national feelings by the reviewer but to a British or any other customer, the important aspect such as quality, features, design, and engineering matter a lot and that is why so many German or Japanese brands sell their cars in huge numbers around the world.
