TATA-OWNED Jaguar Land Rover has recorded a £3.4 billion pre-tax loss in the December quarter amid a decline in car sales, the company said today (7).
The car maker anticipates a loss for the financial year as a whole for the first time in a decade.
Retails for the quarter were 144,602 vehicles, compared with 154,447 a year ago, primarily as a result of continued challenging market conditions in China, offset partially by encouraging growth in north America and the UK.
The company’s sales in Europe were up slightly, despite an eight per cent drop in the overall market. In the three-month period, sales increased for the new Jaguar E-PACE and the electric Jaguar I-PACE as well as the refreshed Range Rover and Range Rover Sport, while the slowdown in China accounted largely for lower sales of other models.
Tata Motors reported revenues of £6.2bn and a pre-tax loss before exceptional items of £273 million (EBIT margin -2.6 per cent) for the quarter. The financial results mainly reflect lower sales in China and higher depreciation and amortization of investment expenses.
The third quarter was also impacted by one-off factors including costs related to planned reduction in inventories, warranty reserve adjustments and currency, and commodity revaluation.
The automotive industry is facing significant market, technological, and regulatory headwinds. At the same time, investment in new models, electrification and other technologies remains high. Given the muted demand scenario and the associated impact on the financials, Jaguar Land Rover has concluded that the carrying value of capitalised investments should be adjusted down, resulting in a non-cash £3.1bn on pre-tax exceptional charge and an overall pre-tax loss of £3.4bn for the quarter.
“This is a difficult time for the industry, but we remain focused on ensuring sustainable and profitable growth, and making targeted investments, that will secure our business in the future,” said Jaguar Land Rover chief executive Ralf Speth.
Jaguar Land Rover ended the quarter with £2.5bn of cash, after repaying a $700m bond which matured in December. The company also had a £1.9 bn undrawn credit facility available at the end of the quarter.