TTM - Jaguar Land Rover loses ground to luxury peers

Jaguar Land Rover is facing production problems that has hit its bottom line just as the automaker is looking to make a jolting transition to electric vehicles.

Part of the issue is that JLR's parent company Tata Motors ( NYSE: TTM ) lacks the clout that luxury rivals Bentley (owned by Volkswagen) and Rolls-Royce (owned by BMW) have working in their favor, according to The Times . While Bentley and Rolls-Royce reported strong sales in 2022, JLR did not keep pace due in part to the semiconductor shortage, although some improvement was seen in Q4.

"They’re a mid-tier player and they’ve found the chip shortage harder to navigate," noted Zeus Capital's Mike Allen.

Looking ahead, the Jaguar Land Rover transition to electric vehicles is said to be pressing because of an upcoming requirement that 22% of manufacturers’ car sales in the UK must be electric in 2024 before rising to an ever higher quota by the end of the decade. Analysts have warned that there has been no communication from JLR on what sort of volume it is forecasting and plans for the electrification of Range Rovers also remain under wraps. The leaves a big potential financial overhang on JLR and Tata Motors in the form of a heavy fine in the UK.

The Seeking Alpha Quant Rating on JLR parent Tata Motors moved to Hold from Sell late in 2022.

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