Could you also talk about Sierra volumes?
Sierra volume - we have received tremendous response when we had launched the car. The challenge has been on the supply side, particularly because of one or two suppliers, especially on the casting side. We have taken a series of corrective actions including additional suppliers. The immediate milestone for us would be to cross 10,000 and then we have plans to further increase the production. Next quarter, we should also be launching the Sierra.ev.
Any update on the Range Rover EV launch timelines and what kind of pre-bookings you are seeing?
It's coming very, very soon. It will be the first of our EV launches, and we've got three reveals coming during the second half of this year. We don't have pre-bookings. We have expressions of interest, and there are 78,000 of those at the last count. I've driven it, and it is fab.
How are we seeing the Chinese OEM competition increasing in Europe and UK? And what does it mean for JLR and its House of Brands?
They're definitely coming. The best plan that we have in relation to the Chinese imports is to rely on our brands, essentially to fight them where they are not. We have vehicles that superbly embody the brands, and the brands are very strong. We expect to be able to use that to operate in a space where we have at least a level of protection versus these imports.
Reduction of breakeven to 300,000. We've been constantly reducing the breakeven points for the last few years. How do you plan to do this? And in some way, does it reflect our volume outlook also?
We are fundamentally looking at three areas that we are going after for the GBP 1.7 billion. First is the entire end-to-end delivered cost all the way from raw materials. We have stood up procurement as a separate vertical reporting into the Board. Second, an area which has not delivered for us is the whole warranty space. While my IPTVs are improving, quality is improving, cost of repair has shot through the roof, particularly in markets like the US. And of course, the amount of investments that we have done on IT, digital, etc., it's an area which needs to deliver productivity for us. We should start working on that and the numbers should start reflecting from the second half of this year itself.
What is the kind of commodity headwind that we have seen and we are likely to see and how we are thinking of passing it on? How do we see our EV volumes step up from here? And percentage of portfolio where we are getting PLI?
Shailesh Chandra: On commodity headwind, we see a nine to 12-month kind of a picture. The impact has been somewhere between 5% to 6% of revenue, definitely upwards of 5%. We have not been able to pass on this to the market. There have been intense cost reduction efforts, which has yielded us about 2% of revenue reduction. We also took about 0.5% increase in April. There will be still residual stress of commodity impact. We are actively considering some level of price increase in the coming month, but not decided as yet. On EV volume run rate, in quarter four, we were at 27,000 roughly. We are consistently hitting a monthly run rate of 9,000. Hopefully, we'll start ramping up further beyond 10,000 from this month onwards. Dhiman Gupta: Almost two-third of our volumes last year was accredited with PLI. So that accounts for about Rs. 1,000 Cr accruals.
Anything you would want to mention on the demand conditions you see in your key geographies?
I think North America as a region is still one where we have growth potential. Our brands resonate really well there. The UK and Europe are stable. And China, as everybody knows, has been through a very, very difficult period, but we have readjusted our retailer numbers and also our retailer stock levels, and we see things at least in the short term, stabilizing. The biggest issues that we're facing are more on the supply side as a result of the conflict in the Middle East. Demand for the moment is slightly a secondary concern.
Any comments on, with the expected fuel price increases we are seeing in Europe, are we seeing any shift in demand for EVs? Does it have any implications on our investments or launch timelines for EVs?
Generally, across the market, there has been an increase in Internet search for EV vehicles over ICE vehicles. Our consumer base, which is more in the high net worth individuals, they are less concerned than the average about the actual price at the pumps. I don't think that's having a direct and significant impact on our demand. Launch timelines, no. The geopolitical split between markets means that we will have to rebalance our investments over time to ensure that we have ICE offerings globally for longer. We are going to need to ensure that we can offer both ICE, PHEV, MHEV and BEV offerings in parallel for longer than we originally thought we would need to.
India EVs, can you talk about the demand environment? And how long-term are you thinking of EV profitability versus ICE?
Demand for EVs has significantly grown since the Middle East crisis started. The jump is nearly 25% to 30%. Extremely strong demand. The issue is supply. From this month onwards, we are already trying to increase the production by additional 10%. On long-term profitability: the trajectory of cost as far as ICE vehicles are concerned is inflationary because of the impending emission regulations, whereas the trend of cost is significantly deflationary in EVs. The combination of these two trends will not only give opportunity for EVs to be completely at price parity, but also from a profitability perspective, it will keep growing stronger.
The partnership with Freelander with CJLR, are we planning to take Freelander globally? And what will be the revenue streams from JLR from Freelander?
Freelander is our JLR brand, and it has been licensed to Chery for manufacturing their car. It is Chery's car other than the design aspect, which we are involved in. It is going to be first sold in China, and then they'll have to make up their mind where they want to go thereafter. For our revenue stream, the main one is royalty for the brand that we have given to them. The brand is still owned by JLR. Another piece that will come through is that CJLR utilization and the toll conversion will be the second revenue stream as 50% of that does come through.
JLR ASPs trended down quarter-on-quarter, while the share of RR and Defender went up. Also gross margins went down quarter-on-quarter. And some color on inventory levels of JLR across the geographies.
Richard Molyneux: ASPs were down marginally Q-over-Q. In sterling terms I think it was about GBP76,000 to about GBP72,000. Biggest individual elements in there are sterling, which got stronger against the dollar quarter-over-quarter. Gross margins went down quarter-over-quarter. That is a little bit to do with higher VME levels and also some charges that we had to take within the warranty space. Inventory is quite tight. We took retailer stocks down, particularly in the US. JLR inventory is in a better place at the end of FY26 than it was at the end of FY25. PB Balaji: Philosophically, being a luxury OEM, we would want to keep our inventories tight, and you should expect that to continue going forward as well.
What is the kind of inventory levels we are seeing in India? And given the demand of some of the models, what's the kind of waiting period you are seeing?
On dealer inventory, we are right now at about 20 day level. Waiting periods would be ranging from four to eight weeks. In general, I'm saying for certain models, of course, like Sierra and all, it is quite high and so is for certain EVs. On industry growth: I am pegging the number around 10% because the first half of last financial year was a low base. So significant headroom in terms of what can impact the consumer sentiment. As far as Tata Motors is concerned, I think this year is going to be more a supply challenge for us rather than demand.
Could you clarify whether the 5% to 7% increase in commodity prices are already in our P&L in Q4, or is it yet to come? And how should we look at the commodity headwinds going forward?
Shailesh Chandra: I'm just giving you a ballpark number of 5% to 6%. I would say 2%, 2.5% would have come last year and significant increase in this quarter, which is expected beyond that. So roughly, you can imagine 3.5% to 4% increase, which we are expecting this quarter. Dhiman Gupta: We had announced a 0.5% price increase in April. We'll keep monitoring the situation and see we can keep taking any measured price increases. Cost reduction programs are very, very robust. Our volumes have gone up by 50%, and there's been a massive effort in scaling up our productions. As the volumes kind of normalize, we'll be able to optimize and further benefit from fixed cost leverage.
You spoke about VME, how are we looking at VME going into FY27?
Generally, it is relatively stable. I think it remains to be seen in China, how the industry absorbs the extra 10% luxury tax that was implemented in the middle of last year. But we are not seeing it rise considerably from the levels that we saw at the back end of the last financial year.
Is there a decline in other expenses for JLR year-on-year and quarter-on-quarter?
Yes, there is. You'll find that the majority of that is actually exchange-related in terms of a reasonably good hedge gain this year versus the opposite effect last year. There is some central cost reductions in terms of very centralized expenses, but the biggest element within there is exchange.
Shailesh, if you could talk about exports and what's the outlook for FY27?
Last year, we had a 4 times jump in exports to 10,000 plus units. And this year also, we are targeting anywhere between 70% to 100% kind of a growth, depending on how we are able to ramp up our production and then further add to our portfolio in South African market.