The importance of the volume loss of Defender can be gauged from the fact that out of 110,000 units of JLR order book at the end of June 2021, 29,000 orders were for Defender.
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Any volume loss of high-volume driver models may have a pronounced impact on the overall volume as well as margins. It must be noted that Defender, Range Rover, Range Rover Sport, and Discovery together contributed nearly 43% of the total retail revenue for the company in the second quarter of FY22.
The cumulative installed capacity at these three plants is around 450,000 for the JLR and accounts for nearly half of the total installed capacity. The contract manufacturing facility at Graz manufactures models such as I-pace. Tata Motors’ UK subsidiary manufactures Defender and Discovery models at the Slovakia plant, while its Solihull plant manufactures models such as Range Rover and Range Rover Sport. “However, it’s encouraging we were still able to grow sales of the Land Rover Defender in Q2.”
“The global semiconductor supply issue represents a significant near-term challenge for the industry, which will take time to work through,” said Lennard Hoornik, chief commercial officer of Jaguar Land Rover. In the sales release for the second quarter, the company had said it is having global retail orders at record levels in excess of 125,000 vehicles despite the impact of the semiconductor shortage on production and sales. The current shutdown translates to four days of production loss for Defender, Discovery, Range Rover, Range Rover Sport, I-pace and E-pace. Tata Motors, in an email response, said no comments since it is in a silent period ahead of the second quarter results. There is a fear that JLR may not be able to reach its break-even production volume around 90,000 this quarter, which would weigh on its operating margin. However, the non-scheduled shutdown may delay expected gradual volume normalisation guidance in the second half of FY22. This may pull JLR’s volumes to its lowest in eight years.Īnalysts have factored in wholesale volume of 90,000-95,000 in the third quarter and 120,000-125,000 units in the fourth quarter based on the company’s guidance of easing the chip shortage in the second half. Instead, it could be 5-10% lower than last year’s volumes. The company managed to despatch only 84,442 and 64,032 units, respectively, in the first and second quarter of the current fiscal.īut now, it seems reaching annual volume of 360,000-370,000 units – that analysts have forecast – would be an uphill task.Īnalysts had forecast a 20% volume growth at the beginning of FY22. JLR has already suffered a loss of close to £4 billion, or about Rs 41,300 crore, in incremental revenues due to the global chip shortage in the first two quarters of 2021-22. Together, all this may result in a volume loss of between 5,000-7,000 units and an incremental revenue loss of £300-325 million, or about Rs 3,100-3.350 crore, sources said.
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