Jaguar in fast lane with bumper profits
By Mary Brasier
Jaguar Cars, which was privatised by the Government last year, has increased profits by 83 per cent to £91.5 million after selling nearly 33,000 cars worldwide. Jaguar has stepped up production at its Browns Lane assambly plant in Coventry to meet increased demand, particularly from the US, which took 86 per cent of the company’s output last year. The chairman , Mr John Egan, said the prospects for 1985 were also encouraging.
“We expect the major luxury car markets to grow during the year and as in 1984 demand for Jaguar cars will continue to exceed supply.”
The strength of the dollar has added extra fuel to Jaguar’s success, although the company has mitigated some of the currency influence by selling forward a “substantial” proportion of its 1984 and 1985 dollar receipts.
“We do not need a low exchange rato to make profits. Steady and reliable growth is preferable to wide profit fluctuations.”
US sales have benefited from a shake-up of the dealer network as part of Jaguar’s moves to pinpoint Its market among luxury car buyers. Shared dealerships with more mass market badges like Triumph and Rover are being renegotiated, and sales are now running at an average of 100 cars per dealer. The US bought 1,826 cars last year and the Jaguar management is looking for at least another 10 per cent increase from the US and other big markets in 1985.
Growth in newer markets like Australia, Canada and West Germany, where Jaguar is challenging BMW and Mercedes on home ground , ranged from 55 per cent to 87 per cent last year. In the UK, Jaguar outstripped all its rivals to lift sales by 7 per cent when the market as a whole shrank . The company’s principal model , the Series 3 saloon, sold 26,730 and worldwide sales of the XJS sports version , rose from 4,868 to 6,070.
Jaguar employees who were given £450 of shares at the time of the flotation , are about to receive a second allocation, taking the value of their holding to about £1,300 at yesterday’s market price of 316p per share. All shareholders collect a 4.75p dividend.
The company took on 1,500 new employees last year to keep pace with the growth in sales and went over to partial double-shift working. The management said yesterday that morale was very high because the company was doing well. Jaguar spent £38 million last year and is stepping capital expenditure up further over the next two years to £50 million in 1985 and between £50 million and £60 million in 1986. The money will go on replacing plant, introducing robotics, and flexible automation.