Jaguar shows first profit since 1990
Ford’s restructuring of Jaguar is at last showing returns after the luxury car maker yesterday announced its first profit since 1990. Jaguar, which has run up losses of more than £800m since Ford’s purchase in 1989, made operating profits in the final quarter of $40m (£26m), against a loss of $145m in the previous corresponding period.
The company still made a loss for 1994 of $155m, although this was cut from $371m in 1993. Jaguar said the improvement in the final quarter was due to continuing cost-cutting and better sales of its XJ6 range, which accounts for 85 per cent of the company’s sales.
Jaguar’s break-even point has been cut from 45,000 to 31,000 vehicles. Last year the company’s output was its highest for four years at 31,477 vehicles, and this year Jaguar expects to produce 38,000 cars. “We had a very encouraging end to the year,” a spokesman said.
Ford ended 1994 with a sharply higher fourth-quarter profit, and more than doubled its yearly earnings. America’s second-largest car maker reported final-quarter profits of $1.6bn, compared with $719m last time. It was the eighth straight quarter of rising profit. Ford’s revenues for the October-December period reached $33.6bn, up from $27.8bn in the previous year. Profits for the year were $5.3bn, compared with $2.5bn in 1993. Revenue was $128.4bn, against $108.5bn.
Alex Trotman, chairman, said: “In the US, Ford’s retail demand has been running above what it was a year ago, and consumer confidence remains strong. In Europe, most economies are well into recovery now, and we expect continued improvement.”
Last year Ford sold 6.63 million vehicles, compared with 5.96 million in 1993. Its share of the US car and truck market was 25.2 per cent, compared with 25.5 per cent a year ago. And the company’s share of the Western Europe market was 12.1 per cent, up from 11.8 per cent.
Income included a one-time gain of $110m from the recent devaluation of the Mexican peso. However, the devaluation is expected to hit future earnings, Mr Trotman said.