Jaguar Land Rover books record loss as Chinese market stalls

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Sharecast News | 20 May, 2019

Jaguar Land Rover posted a record £3.6bn annual loss on Monday as revenues dipped amid a drop in demand from China, though the business returned to profitability in the final quarter.

The luxury car manufacturer's revenues were down at £24.2bn compared to £25.8bn for the year before as continued weakness in China offset growth in Europe and the US leading to a 5.8% decline in retail sales year-on-year to 578,915 vehicles.

A large proportion of the £3.6bn loss before tax, which marked a stark increase over the £1.5bn loss from the year before, was due to a £3.1bn write down in the third quarter to cover falling demand for newer models and diesel vehicles, with fourth quarter transformational costs accounting for a further £0.2bn.

Before these exceptional costs, the company, which is owned by Indian outfit Tata Motors, achieved a full-year pre-tax loss of £358m.

However, the fourth quarter saw Jaguar Land Rover swing to a pre-tax profit of £120m after nine consecutive months of losses, which delivered cost and cash improvements after redundancies and manufacturing investments, including a new plant in Slovakia.

The company has now delivered the first £1.25bn of a £2.5bn turnaround programme which is scheduled for completion before March 2020.

Ralf Speth, chief executive of the company, said: "Jaguar Land Rover is focused on the future as we overcome the structural and cyclical issues that impacted our results in the past financial year. We will go forward as a transformed company that is leaner and fitter, building on the sustained investment of recent years in new products and the autonomous, connected, electric and shared technologies that will drive future demand."

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