Jaguar Land Rover Fights To Stay Alive Amid Harsh Financial Future

By Daud Gonzalez - June 24, 2019

JLR sold well over 100,000 units in the U.S. alone last year. What if that wasn’t even close to what the brands needs to keep themselves alive?

Both Jaguar and Land Rover are some of the oldest automotive brands in the world, and have a rich legacy and culture in their native United Kingdom. Since their merger in the the late sixties, both companies have had far from stable economies and have swapped hands between more than one company. Land Rover was purchased as a subsidiary of BMW and Ford did the same with Jaguar.

However, things started to look financially positive after the acquisition of both companies by Indian super conglomerate Tata Motors in 2008, bringing the long-awaited revival the brand had long been looking for. Brands before had failed to bring JLR back into front-row prominence, but Tata managed to turn the British duo around. However, we still must recognize that a revival such as this is an upstream battle. Thanks to CNBC‘s YouTube special on the case, we’ll be able to go into more detail about the financial future of JLR and what uncertainties may lay forward.

Many people placed doubt in JLR as a brand because of their vehicles’ notoriety for being unreliable and expensive. However, Tata fixed these issues, by allowing giving JLR a huge budget and then leaving them to make the best vehicles possible. This development pushed Jaguar and Land Rover into being highly sought-after brands.

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However, nothing good last forever and now, JLR finds itself in a familiar unstable financial position, similar to their pre-Tata era. One of the main issues JLR is facing is their market share in China and keeping up with rival brands in their native European market. CNBC begs the question, will Tata revive the company again, like it once did or will it accept defeat now to minimize its losses?

This dilemma began in 2018, when JLR posted its first loss in almost a decade since its Indian acquisition: 4.35 billion dollars. As a result, the company cut 4,500 jobs or 10% of the total workforce for the company. This had a widespread effect not just on employees of the British brands, but of their parent company as well. In the last 5 years, Tata Motors stock value has gone down 63%. A rumor resulted that due to the losses for both sides, Tata was considering selling the brands to Groupe PSA, manufacturers of French automobiles such as Peugeot, Open and Citroën. However, this has been denied by Tata’s press team.

Although Land Rover is the stronger of the two brands, the results speak for themselves in the Chinese market, with sales plummeting 34.1% during the 2018-2019 fiscal year within the country. The impending results of Brexit also will effect the company greatly, with more than 40% of manufacturing materials being purchased outside of the United Kingdom.

However, the United States maintained a strong presence from the brands, selling over 122,000 units in 2018, catering to the increasingly large SUV market. However, it is very likely that the U.S. alone will not be enough to sustain the brand internationally, regardless of its importance and size. What will be the result of JLR’s constant battle to survive? We’ll have to wait and see.