Jaguar Land Rover returned a profit of £55m in the last three months of 2009 after a loss of £60m in the previous quarter.
The company’s owner, India’s Tata Motors, said the bounce back was thanks to stronger market conditions and claimed its range of new models had helped its performance.
JLR sales jumped 68% from a year earlier to more than 165,000 models, with most of the growth coming from Russia, Europe, North America and China.
Tata, which bought the business from Ford in 2008, said cost-cutting also boosted results and it plans to make further changes to the business.
JLR employs 14,500 staff in the UK but Tata is deciding whether to shut its factory at Castle Bromwich in the West Midlands, which makes Jaguars, or the site at Solihull, which makes Range Rovers. The company also wants to trim the wages of new employees by 20%, and close its final salary pension scheme to new members.
On the plus side JLR plan to create up to 800 new jobs at Halewood on Merseyside, where a new Range Rover will be built.
Talks with unions over pay and pensions recently broke down and earlier this month the company’s chief executive, David Smith, stood down but this was said not to be linked to the recent breakdown of talks.