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JLR announces write off of 1.5bn pounds in Q4 as part of restructuring

Jaguar Land Rover will take a one-time write off of 1.5 billion pounds in the March quarter according to reports.

This is as a part of a restructuring exercise under “Re-imagine” strategy of the company.

Moreover, it is the second biggest write-off by Tata Motors’ UK subsidiary.

The aim is to change tack and turn profitable amid disruptions and heightening competition.

Positive cash flow will offset cash write-off of 500 million GBP in FY22.

JLR took a write-off of 3.7 billion pounds in December quarter due to a slowdown in China and Brexit uncertainties.

It is also planning to increase its EBIT margins from 4 per cent to over 10 per cent by FY26.

Around 300 basis points will come on back of a refocus on its product portfolio.

However, the new vehicle architectures will lead the remainder.

Meanwhile it will realise the full benefits (£ 6 billion) of Project Charge by the end of March quarter.

JLR has brought down the whole sales break-even volumes from 600,000 in FY19 to 400,000 to 450,000 units now.

This move is to help the company withstand the cyclicality in sales and boost margins.

Rationalization of three new electric first architectures is work in progress.

It includes Modular Longitudinal Architecture, Electrified Modular Architecture and Pure Battery Electric Vehicle platforms.

The Reimagine strategy will focus on increasing the company’s share in the most profitable segments.

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