JLR volumes up 41% yoy in July-12; slightly below estimates
Global wholesales of Jaguar Land Rover in July-12 were at 26,921
vehicles, higher by 41% yoy. This is slightly below our estimate of 28,600
units and consensus expectations of around 27,800 units. Volumes ex-
Evoque sales have declined by 4% yoy. Evoque volumes were around
8,500 units. Jaguar sales for the month were 4,064 nos., down 7% yoy,
while Land Rover sales were 22,857 nos., higher by 41% yoy. We
believe that there could be minor negative reaction to stock price on
these numbers.
Company can still achieve our FY13F volume estimate of ~368,000
units
Total JLR volumes for FYTD13 (Apr-July,12) are up 36% yoy to 110,373
units. Company will have to do monthly volume run rate of around
32,000 units in the remaining 8 months (implied yoy growth of 11%) to
meet our FY13F estimate of around 368,000 units. Considering the
increase in production in 2HFY13 due to the addition of a 3rd shift at its
Halewood plant and launch of new Range Rover by end-CY12, the
company should be able to meet our volume estimates.
Possible downside risks to margins – Maintain Neutral
However, there could be some downside risks to margins (from 1QFY13
levels of 14.5%) due to:
Weaker product mix – moving towards Free Lander and Evoque, as
old Range Rover gets phased out
Possible rise in incentives as demand pull weakens in US and Europe
Weaker product mix/pricing pressure in China.
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