Jaguar Land Rover has raised hopes the global shortage of computer chips could be near its end after the automotive giant saw a "gradual improvement" in supply during the first three months of 2022.
The company said the trend led to improved production and wholesale volumes compared to the previous quarter.
JLR added the increased supply is expected to continue through its next fiscal year.
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For the three months to March 31, 2022, JLR sold just over 79,000 vehicles, a 1.4% drop on the previous quarter and a 36% fall for the year.
Jaguar sold 14,574 cars, up 1.2% on the third quarter but down by 37.9% for the year.
A total of 64,434 Land Rover vehicles were sold, down 2% on the previous three months and a 35.6% year-on-year fall.
JLR said: "Despite the impact of the semiconductor shortage on production and sales, the company continues to see strong demand for its products with global retail orders again setting new records in the quarter.
"As at 31 March 2022, the total order book has grown to over 168,000 units, up around 14,000 orders from the 31 December 2021.
"Demand for the new Range Rover and new Defender are particularly strong with over 45,500 and 40,000 orders respectively."
JLR has UK sites in Whitley, Gaydon, Solihull, Manchester, Castle Bromwich, Wolverhampton and Halewood.
Chief commercial officer Lennard Hoornik said: "The successful New Range Rover launch, as well as the momentum gained from Defender, has resulted in a steadily increasing order bank, now at a record 168,000 units.
"The customer response to the first deliveries of New Range Rover is strong and we remain optimistic for the future, despite the geo-political and macro-economic challenges facing the industry at present."
On the continuing crisis in Ukraine, JLR added: "The conflict in Ukraine has not materially impacted our wholesale volumes in the quarter.
"The impact on production has also been limited due to active management of the parts supply chain, including developing alternatives for the relatively small number of parts that are sourced from the affected countries.
"However, it is difficult to predict how supply and inflationary pressures will impact the coming quarters.
"Our first priority remains the welfare of our employees, and the company has been providing humanitarian support for the families of colleagues impacted by the conflict and through the supply of vehicles to the International Federation of Red Cross and Red Crescent Societies."
JLR has said it expects to report its full-year results for the 12 months to March 31, 2022, in May.
