Jaguar Land Rover posted a pre-tax loss of £455m in its latest financial report, revealing the impact of the semiconductor shortage.
That number includes an exceptional charge of £43m related to the company’s operations in Russia, where the company halted sales in March after invading the country in Ukraine.
Sales for the year fell 7% year-on-year to £18.3 billion as the company’s production was slowed by a shortage of crucial computer chips.
In contrast, Jaguar Land Rover recorded an overall profit of £662m last year, but around £1.5bn of spending related to its Reimagine transformation strategy resulted in an overall loss of £861m.
The British manufacturer’s sales volumes fell significantly in the year ended 31 March 2022, with wholesale sales down 15% to 294,182 units and retail sales down 14% to 376,381 units.
That’s despite a late 11% rise in wholesale sales last quarter and a 1% decline in retail sales over the same three-month period. That growth, according to JLR, was offset by the end of production of the popular previous-generation Range Rover, limiting sales growth to just 1% at £4.8bn for the quarter.
However, the company is noticing a dramatic increase in the share of electrified vehicle sales – whether pure electric, plug-in hybrid or mild hybrid. These accounted for around 66% of total sales, up from 51% in 2021.
As of March 31, 2022, JLR has a record 168,000 orders to fulfill, including around 46,000 for the new Range Rover and 41,000 for the Land Rover Defender.
Importantly, according to JLR, Russia and Ukraine — markets where it doesn’t currently sell vehicles — typically account for about 2.5% of its sales. It said it was sourcing “a relatively small number of parts sourced from affected countries,” but “it’s too early to tell how future raw material supply and pricing might be impacted.”