Jaguar Land Rover will decide “in a few weeks” whether to further reduce spending and possibly cut models or modify future programs at the British automaker, a top executive said.
The automaker first wants to determine whether global sales will rebound from a collapse caused by the coronavirus pandemic before taking additional steps, PB Balaji, who is chief financial officer at JLR parent Tata Motors, said June 15 during a call with investors.
“In the case of JLR, we need to wait for a few more weeks to understand this better,” Balaji said when asked by the call’s host, Robin Zhou of Bernstein Research, whether JLR would have to become smaller and leaner if global sales don’t pick up. “We don’t want to react to newspaper headlines to decide long-term strategy [because] the decision will impact us three to four years from now.”
Some new model programs have already been paused, JLR CFO Adrian Mardell said on a separate earnings call. He stressed that, so far, no programs had been significantly changed or canceled, but said decisions on paused programs would depend on the company’s finances.
“We will come back later in the year once we have figured out the speed of liquidity build and affordability and what that means for those programs on pause,” he said.
JLR reported a 422 million pound (471 million euro, $529 million) pretax loss in its 2020 fiscal year that ended in March after coronavirus-related factory shutdowns and reduced sales cost it 599 million pounds.
The automaker is already in the middle of a cost-cutting program after a slump in China resulted in a record pretax loss of 3.6 billion pounds during its 2019 financial year.
JLR will reduce capital expenditure to 2.5 billion pounds for the current fiscal year, from the more