JLR likely to cross 500,000 units in sales this year

The economic downturn in China has failed to prevent the sales of Tata Motors-owned Jaguar Land Rover from moving closer to the half-million-mark in the past year, as analysts expect it to cross 500,000 units in sales during 2016.

Sales rose five per cent in 2015 to 487,065 vehicles, with strong growth in Europe and the US compensating for a sharp dip in China and other overseas markets, where sales were down 24 per cent and 7 per cent respectively.

The year 2015 was significant for the company, as it began selling its mid-sized executive Jaguar XE, aimed at enabling Jaguar to reach out to new customers, and the Land Rover Discovery Sport, which has been its second best-selling Land Rover vehicle after the Evoque.

It also updated a number of other vehicles, invested further in its engineering and manufacturing centre, entered a partnership with Austrian contract manufacturer Magna Steyr, and announced plans for a new plant in Slovakia.

Britain and Europe proved particularly strong, with sales of over 100,000 in each, while sales in North America continued to flourish, up 3 per cent in the year.

While Land Rover continued to dominate and register the fastest growth (403,079 cars, a six per cent increase on the year before), Jaguar sales also grew, up three per cent, helped by the XE and the XF.

The year also posed challenges, with the economic slowdown in China hitting automakers, alongside the chemical explosion in Tianjin in August, which destroyed or damaged 5,800 JLR vehicles and forced the company to take a £245-million exceptional charge.

Ian Fletcher, senior auto analyst at IHS Global Insight, expects the company to deliver a stronger performance in 2016, as the XE, XF and Discovery Sport reach more and more markets, including the XE in the US, as well as the launch of the F-PACE.

''For the XE it was quite a soft launch, introduced first in Europe, and only at the end of the year it started reaching out further, and it was the same for the Discovery Sport. These will contribute massively in 2016.''

IHS Global Insight estimates that 2016 sales for the group will reach 564,500 units, with demand in China recovering to around 132,000 units.

''The biggest problem they have is capacity… a lot of the vehicles they are introducing are being produced in sites that are quite constrained already,'' he added. The company is set to expand production over the next few years, commencing production in Brazil for the local market in 2016, and the plant in Slovakia set to open in 2018.