Jaguar Land Rover's sales in China are finally on the up

Mostly thanks to Land Rover.

23 October 2019 at 08:40

Rejoice! Things are starting to look good again for Jaguar Land Rover in China.

The market was one of the biggest for the British company, but a decline in demand in the region ended up playing a sizeable role in its ongoing financial difficulties, including a loss of around £3.4 billion in the first quarter of this year alone.

Now Automotive News Europe is reporting that Jaguar Land Rover has enjoyed a growth in sales for the last three months

"The market is down, but we are growing by double digits, so not bad," Jaguar Land Rover CEO Ralf Speth said last month at the opening of the company's new development centre in Gaydon.

Sales in China were up by 18 percent in September, with 8,779 cars sold. That followed a 17 perent increase in August and a 40 leap in July.

JLR is seeing the first signs of a rebound but "I am not saying, yes we have managed the turnaround," Felix Braeutigam, JLR’s chief commercial officer, said at the Frankfurt motor show, remaining cautious despite the company's improving fortunes.

According to Bernstein analyst Max Warburton, Jaguar Land Rover was making as much as £60,000 profit on each Range Rover it sold in China over the last decade, so when sales in China fell by 22 percent last year, it was a huge cause for concern. The country, which was the company's biggest market, dropped to fourth on Jaguar Land Rover's sales chart and it decided to cut which models it built in China as a result.

"One reason we had a difficult year last year was that we took a conscious decision that we don’t want to compensate for the overall slowdown [in China] by pushing volume at any cost," Braeutigam said.

As a result of its struggles, Jaguar Land Rover is now looking to increase demand rather than supply in China.

“There is a lot of gold, but it will be more and more expensive to extract it,” Braeutigam added. “It’s becoming probably the most aggressive and most fought-for premium automotive market.”

"We feel our brands are so premium, so exclusive, that we want to create demand, not push supply."

Much of Jaguar Land Rover's future in China depends on the Land Rover brand. The SUV manufacturer's sales increased by 36 percent in August to 6,565 sales while the Jaguar brand's sales dropped by 39 percent to 2,028 sales.

The new Evoque (pictured) as responsible for much of that, with 591 models of the compact SUV being shifted in August. In August 2018 the previous Evoque was sold just 381 times according to JATO.