Coronavirus impact: Jaguar Land Rover gets funding from China
Jaguar Land Rover (JLR) has entered into agreements with China for an unsecured three-year term loan facility of five billion Yuan which is roughly 704.50 million dollars. Arthur Yu, president and chief financial officer at JLR China said that Chinese banks would provide the company with the three-year revolving loan. The banks that would be a part of this agreement include Bank of China, ICBC, China Construction Bank, Bank of Communications and Shanghai Pudong Development Bank.
The loan has been taken up because the supply chains of global automakers have taken a critical hit because of the Coronavirus pandemic and the lockdown. Sales from China used to account for 25 to 30 per cent of the manufacturer's global sales. But the past two months make up 50 per cent, Yu said.
The loan facility "can help JLR China better manage cash flow amid the coronavirus epidemic," Yu told reporters on Friday. This is the first time the Tata-owned car manufacturer has received financial help from China. The company had a financial problem before the pandemic hit, the company reported a loss of 113 billion dollars in late 2018. This led JLR to resort to cost-cutting methods like scrapping unnecessary projects and slashing jobs.
The manufacturer has a production partnership with Wuhu-based Chery Automobile. The company also said that the sales in April were the same as last year and there was a growth of sales in May. Yu said that the company expects China's luxury car segment sales could be identical to last year's numbers or there could be a slight growth.
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