AutoBeta(AutoBeta.net)06/06 Report--

In response to the impact of the COVID-19 epidemic and replenishing cash flow, Jaguar Land Rover announced that it had reached a guaranteed loan agreement of 5 billion yuan with Chinese lenders, the first debt financing for Jaguar Land Rover in China.

It is understood that Jaguar Land Rover's financing in China took two months from the negotiation of the plan to the final implementation. The banks providing loans include Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Bank of Communications and Shanghai Pudong Development Bank, providing a total of 5 billion yuan in loans for a period of three years.

Yu Junrui, vice president of Jaguar Land Rover and chief financial officer of China, said, "Automobile is an industry with a very long industrial chain and high capital requirements, and cash is the blood of the industrial chain." Under the epidemic, how to ensure cash flow is very important for enterprises. " Yu Junrui also said that the financing not only contributes to the daily operation of the company, but also reserves funds for future R & D and investment of Jaguar Land Rover China.

In fact, due to poor financial performance and the impact of the epidemic, Jaguar Land Rover struggled and applied for loans to tide over the difficulties. Foreign media reported at the end of May that Jaguar Land Rover was seeking assistance from the British government to deal with the decline in new car sales caused by the novel coronavirus pandemic.

Jaguar Land Rover is in talks to borrow more than 1 billion pounds through the UK government's emergency loan scheme, including seeking tax breaks, research grants and other subsidies, according to people familiar with the matter. In response, Jaguar Land Rover said it was "having regular discussions with the government on a range of issues", but declined to provide details.

Jaguar Land Rover sold 557706 vehicles in 2019, down 5.9% from 2018, mainly hit by a weak Chinese car market and falling demand for diesel cars in Europe, according to data released by Jaguar Land Rover. In the Chinese market, Jaguar Land Rover's full-year sales fell 13.5%.

According to the two major brands, Jaguar sold 161601 units in 2019, down 10.6 per cent from a year earlier, while Land Rover sold 396105 units, down 3.8 per cent from a year earlier.

In terms of performance, Jaguar Land Rover lost 3.6 billion pounds (32.28 billion yuan) in fiscal year 2018 (April 1, 2018-March 31, 2019). In early 2019, Jaguar Land Rover announced plans to cut about 10% of its jobs, 4500 jobs, and take further measures to reduce costs. Jaguar Land Rover lost 395 million pounds in the first fiscal quarter from April to June in 2019, while Jaguar Land Rover turned a profit in the second quarter from July to September, with a pre-tax profit of 156 million pounds. The cost-cutting plan allowed Jaguar Land Rover to make a quarterly profit temporarily.

Performance uncertainty and losses have further exacerbated Jaguar Land Rover's financial woes. At present, Jaguar Land Rover has applied for a guaranteed loan of 1 billion pounds (9 billion yuan) in the UK, but there has been no result. Loans from China have eased Jaguar Land Rover's current difficulties.

Jaguar Land Rover's wholesale sales in China rose 38.3 per cent in May from a year earlier and 24.2 per cent month-on-month, according to official data. Jaguar Land Rover sales in China accounted for nearly 50 per cent of global sales during the outbreak. But according to survey data from the China Automobile Circulation Association, Jaguar Land Rover had more than 2.5 months of dealer inventory in April, making it the fifth-highest brand by inventory.

Jaguar Land Rover said it had further cut its sales forecast for 2020 from 510000 to 45-460000 because of the uncertainty caused by the COVID-19 epidemic.

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