Tata Motors-owned JLR drives up plan to invest Rs 1.9 trn till FY28

20% increase till FY28; firm eyes double-digit Ebit of 10% by FY26

Tata Motor’s British luxury vehicle brand Jaguar Land Rover (JLR) has announced plans to invest £18 billion (Rs 1.9 trillion) until the financial year 2028 (FY28), 20 per cent more than its earlier announced plan of £15 billion.

A significant portion of this investment will go into product development.

In April 2023, JLR had outlined an investment plan of £15 billion over the next five years until FY28 as it planned to reposition itself as an electric-first, modern luxury carmaker by 2030.

In FY24, the company invested £3.3 billion, and in FY25 it aims to invest £3.5 billion. In the same year, the automaker expects to turn net cash-positive.

 

According to an Investor Day 2024 presentation shared by the company, JLR is targeting to achieve an earnings before interest, taxes (Ebit) margin of over 8.5 per cent in FY25 and improve it further to 10 per cent in FY26.

Last year, JLR’s Chief Executive Officer Adrian Mardell said the company, as part of its Reimagine strategy, would reposition itself as an electric-first, modern luxury carmaker by 2030 as it makes strides towards its financial goals of achieving a net cash-positive position by FY25 and double-digit Ebit by 2026.

JLR delivered a strong financial performance in FY24 with record revenue of £29 billion.

Much of JLR’s investment is going towards enhancing its product portfolio with an electrification road map. 

A new battery electric Range Rover is coming soon, and there are plans to invest further in the Range Rover and Defender portfolios, the firm has said.

Investments would be made to enhance its industrial footprint, vehicle programmes, digital technologies as well as people skills.

The company said it was in the delivery phase of its electrified future with physical testing underway across all its three vehicle architectures.

JLR has three architectures — the Modular Longitudinal Architecture (MLA) that underpins Range Rover Electric and enables Internal Combustion Engines (ICE), mild and plug-in hybrid powertrains; the Electrified Modular Architecture (EMA); and Jaguar Electrified Architecture (JEA) solely for battery electric vehicles.

Besides investing in product development, the company has been focusing on margins and return on capital employed (RoCE).

The Ebit margin improved from 8.6 per cent in Q1FY24 to 9.2 per cent in Q4FY24.

The free cash flow also increased during this period, from £451 million in Q1FY24 to £892 million in Q4FY24.

Average revenue per unit was above £70,000 in FY24, JLR noted in its investor presentation. The company also said it was trying to improve its RoCE from 21.3 per cent in FY24 to over 22 per cent in FY25.

It is trying to reduce working capital by reducing inventory and work-in-process, as well as reducing early payments to suppliers.
 

JLR to licence Freelander to Chinese JV partner to develop EVs

JLR said on Wednesday that it has signed a letter of intent with its Chinese JV partner Chery Automobile to license the Freelander brand to their JV for development of electric vehicles in China.

Under the proposed new licensing agreement, CJLR -- a 50:50 joint venture of Jaguar Land Rover Ltd and Chery Automobile Company Ltd -- will produce an advanced portfolio of EVs based on Chery’s EV architecture, exclusively under the Freelander name.

The vehicles will be designed in collaboration with both Chery and JLR’s creative teams to create a new positioning in the rapidly growing China mainstream New Energy Vehicle (NEV) market.

The products will be built at CJLR’s existing manufacturing facility in Changshu, the company said in a statement.

Adrian Mardell, JLR’s Chief Executive Officer said this strategic step for JLR underlines their ongoing commitment to China. Working together, they can develop new models of collaboration for the world’s largest and fastest-growing electric vehicle market, Mardell felt.

JLR’s Freelander brand was a Land Rover vehicle which was produced between 1997-2015.

It was succeeded by the Discovery Sport in 2016. Chery Group Chairman Yin Tongyue said Chery and JLR are forging an innovative collaboration model that “epitomises” their “growth path for the future”.

JLR China imports increased by 35 per cent to 54,000 units in FY24, JLR said in its investor presentation. Retail volumes in the domestic Chinese market dipped by 2 percent in FY24 to 50,000 units.