Jaguar Land Rover (JLR), Britain’s biggest carmaker, has revealed a 13.2 percent decline in quarterly sales, turning longstanding profits into a pre-tax loss of £90 million.
The firm said a big slowdown in China was the primary cause of the decline, but softening sales in North America, a WLTP-affected European market and the Brexit-afflicted UK market also contributed to the loss.
The sales fall to 129,887 vehicles generated revenues of £5.6 billion, itself a 10.9 percent year-on-year decline.
Jaguar Land Rover CEO Dr Ralf Speth says the company is already taking action to reverse the losses. He said the firm has “launched far-reaching programmes to deliver cost and cashflow improvements.
“Together with our ongoing product offensive and calibrated investment plans, these efforts will lay the foundations for long-term sustainable, profitable growth.”
Two initiatives have been launched to address the profits decline, called ‘Charge’ and ‘Accelerate’. These will “identify short-term cost and cashflow improvement as well as longer-term operating efficiencies”.
The target is profit, cost and cashflow improvements of £2.5 billion over the next 18 months, he said. Spending already planned is going to be reduced by £500 million, to £4 billion, both this financial year and the next one.
JLR adds it expects its financial performance to improve in the second half of the financial year. It therefore anticipates pre-tax profits to still break even for the full year ending 31 March 2019, albeit “impacted by the weaker than planned first half”.
The firm added it ended the quarter with £2.6 billion of cash and £1.9 billion in undrawn credit.