Jaguar Land Rover posts £270m loss amid 4,500 job losses

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JLR’s car sales were down nearly 10,000, they reported a £273 million pre-tax loss for the last three months of 2018.

The prestigious car maker saw revenues down from £6.3 billion a year before to £6.2bn.

Jaguar Land Rover, which is the UK’s largest car marker and has its engine manufacturing plant at the i54 north of Wolverhampton sold 154,447 cars last year compared with a 144,602 this year.

They have said that its transformation programme was on track to achieve £2.5 billion of cash and profit improvement by March 2020.

The fall in car sales is due to the challenging market conditions in China, which was an offset partially by encouraging growth in North America and the UK.

The company’s sales in Europe however were up slightly, despite an eight per cent drop within the overall car sales market.

In the initial three month period, sales increased for the new Jaguar E-PACE and the electric Jaguar I-PACE as well as the Classic Ranger Rover and Range Rover Sport, while the slowdown in China accounted largely for lower sales of all other models.

Another impacted one-off factor included costs related to planned reduction in inventories, warranty reserve adjustments and currency and commodity revaluation.

Although the automotive industry is facing significant market technological, and regulatory head minds. At the same time, there is heavy investment being made into new models, electrification and other technologies.

Given the decrease for demand for its vehicles JLR has concluded that the carrying value of capitalised investments should be adjusted. Therefore, resulting in a non-cash £3.1bn pre-tax exceptional charge and an overall pre-tax loss of £3.4 billion.

Dr Ralf Speth, JLR chief executive, said: “Jaguar Land Rover 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.”

JLR realised £500m of cash improvements through the ‘Charge’ programme in the third quarter.

JLR announced last month that it would reduce its global workforce by 4,500 people. This is expected to result in a one-time exceptional redundancy cost of around £200m.

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