Tata Motors-owned Jaguar Land Rover (JLR) has raised its five-year investment spend guidance by a fifth to £18 billion and nearly doubled its margin guidance as the British carmaker accelerates electrification of its portfolio and pushes for adoption of new technologies.
In June 2023, JLR had announced an investment spend of £15 billion till FY28 with an average spend of £3 billion a year. This has now been revised to around £4 billion a year.
The investment spend will see a marked rise in FY25 and FY26 to £3.5 billion and £3.8 billion, respectively, from £3.3 billion clocked in FY24 as the company pushes to nearly double its EBIT (earnings before interest and tax) margin to 15% in the long term.
JLR exceeded its £2-billion target of free cash flow for FY24 to end the year at £2.3 billion. While this is expected to dip to £1.8 billion in FY25 and remain constant in FY26, the long-term vision is to push it to £3 billion, a presentation by JLR on its Investor Day (Wednesday) showed.
Reducing costs, minimising working capital through reduction in inventory, reduction in early payments to suppliers, and a richer mix of higher margin vehicles are some of the ways JLR hopes to achieve net cash positive status in both FY25 and FY26 and build a ‘strong balance sheet’ in the long run.
FY25 will see the first full year of products built on the MLA (modular longitudinal architecture), an electric platform designed to be used for e-drive and plug-in hybrid vehicles. The two brands have also developed electric-only platforms called EMA (electrified modular architecture) and JMA (Jaguar electrified architecture).
JLR claimed that the waitlist for the Range Rover Electric has crossed 38,000. Its launch will take place in 2025. The product line-up of JLR also features Range Rover Evoque refresh, Discovery Sport refresh, a new Jaguar, first EMA-based battery electric vehicle, Range Rover Sport SV, Defender 7-seater, and the Defender Octa which debuts in July.
While no volume guidance was given by JLR, it saw a growth of 25% during FY24 to 401,000 units, powered by the North American market which grew by 29% and the UK market (33%). Both these markets comprise 47% of JLR’s global sales.
