JLR, which employs more than 4,000 people in Merseyside, reported a pre-tax loss of £273m for the three months to December 31 plus a 3.1bn write-down in the value of its assets. Tony McDonough reports
Carmaker Jaguar Land Rover (JLR) said falling vehicles sales in China led to its biggest-ever quarterly loss of £3.4bn in the last three months of 2018.
JLR, which employs more than 4,000 people at its factory in Halewood on Merseyside, reported a pre-tax loss of £273m for the three months to December 31 but also revealed a £3.1bn write-down in the value of its plants and other investments.
Vehicle sales during the quarter fell to 144,602, down form 154,447 during the same period in 2017. Sales, which fell from £6.3bn to £6.2bn, were up slightly in the UK and North America but a”challenging market conditions” in China led to an overall fall.
JLR said its “transformation” programme on track to achieve £2.5bn of cash and profit improvement by March 2020. In January the company confirmed it would reduce its global workforce by 4,500 people, starting with a voluntary redundancy programme in its UK operations.
At Halewood, workers assemble the Evoque and Discovery Sport models which have both proved a hit in the UK and overseas. JLR, owned by India-based Tata Motors, has invested £110m in the plant to enable to produce the next generation Evoque model.
Carmakers are struggling with falling sales at home and abroad, particularly with the plummeting demand for diesel models. Brexit is also causing concern and uncertainty across the automotive sector.
JLR chief executive Ralf Speth said: “JLR reported strong third quarter sales in the UK and North America, but our overall performance continued to be impacted by challenging market conditions in China.
“We continue to work closely with Chinese retailers to respond to current market conditions with a ‘Pull’ based approach to vehicle sales. Today, we are also announcing a non-cash exceptional charge to reduce the book value of our capitalised investments.
“This accounting adjustment is consistent with the other decisive actions that we must take as part of our ‘Charge’ and ‘Accelerate’ transformation programmes to create an efficient and resilient business, enabling Jaguar Land Rover to counter the multiple economic, geopolitical, technological and regulatory headwinds presently impacting the automotive industry.
“We are taking the right decisions to prepare the company for the new technologies and strong product offensive that will enable a long term future of sustainable profitable growth.”