JLR sharply increased retail support in the first quarter of its 2026/27 financial year as the car maker worked harder to convert demand into sales against a backdrop of supply disruption, falling wholesales and the wind-down of Jaguar’s outgoing range.
Variable marketing expenditure rose from 4.1% to 7.1% of revenue year-on-year in the three months to June 30, indicating a much greater level of spending on incentives and other retail support.
JLR said profitability was affected both by lower volumes and by market conditions that pushed retail variable marketing expenditure higher although the business did not break out which individual finance offers, discounts or other retail programmes accounted for the increase.
The increase came even as JLR’s most profitable Range Rover, Range Rover Sport and Defender models accounted for 80.8% of wholesale volumes, up from 77.2% a year earlier. Overall wholesales however fell 9.2%, contributing to a 9.6% drop in revenue to £6.0 billion.
New product activity
Supply was another constraint. JLR said volumes were hit by a fire at a major component supplier at the start of the quarter, disruption linked to conflict in the Middle East and the planned run-out of outgoing Jaguar models.
That combination reduced dealer stock availability at a time when JLR is preparing for a significant wave of new product activity.
PB Balaji, chief executive officer at JLR, said: “JLR delivered first quarter profits of £109m and an adjusted EBIT margin of 2.8%. Despite the near-term industry challenges, we continue to see strong demand for our brands, and look forward to the launch of four sensational new products in the coming months: Range Rover Electric, Range Rover Sport Electric, Range Rover GT and Jaguar Type 01.”
Efficiency, investment
JLR also reiterated that its Enterprise Missions programme is expected to deliver £1.7bn of operating efficiencies over two years.
The company has not announced any dealer-specific measures linked to the savings programme, although further detail is expected with its second-quarter results.
JLR added that it remains committed to £18bn of investment over five years from FY24 as it funds its new product launches and wider transformation.
Profit before tax and exceptional items fell 68.9% year on year to £109m, while adjusted EBIT margin dropped from 4.0% to 2.8%.
Profit after tax was £66m, down from £248m a year earlier. Free cash flow was negative £998m, while JLR ended the quarter with £1.7bn of cash and £5.9bn of total liquidity.
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