Published: Sun, February 10, 2019
Markets | By Otis Pena

Jaguar Land Rover Bleeds $4.4 Billion In 4th Quarter Over Trade Tensions

Jaguar Land Rover Bleeds $4.4 Billion In 4th Quarter Over Trade Tensions

Tata Motors Ltd on Thursday forecast its United Kingdom unit Jaguar Land Rover (JLR) Automotive incur an operating loss this fiscal year mainly because of continued muted demand in JLR's single-largest market, China.

Last month JLR said it would cut about 10 percent of its 42,500-person workforce, mostly in its home market. The home-grown automaker recorded its biggest ever quarterly loss for the December quarter at Rs 26,960 crore after dealing itself a whopping Rs 27,838 crore non-cash write-off for Jaguar Land Rover (JLR).

Jaguar Land Rover booked a loss for the last three months of 2018 as sales collapsed in China.

Considering the ideal storm of woes engulfing JLR at the moment - from the damning of diesel to a slow down in China, from a loss of love for saloon cars to Brexit confusions - performance in the last quarter could have been a lot worse, with sales of £6.2bn down from £6.3bn and numbers down from 154k to 144k.

In an effort to mitigate to impact of weaker demand in China, JLR is focusing on generating profits for its auto dealers, with the company looking to incentivise retail sales over wholesale, Balaji told reporters.

Tata said JLR would post an operating loss in the year to March after having previously projected a breakeven.

JLR sold 144,602 vehicles in the last quarter, down six per cent year-on-year.

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Tata Motors' challenges with JLR continued in 3Q as it took a 3.1 billion pound non-cash impairment and even adjusted for this, performance was below expectations.

In a presentation to investors, JLR said demand is likely to "remain muted due to geopolitical, economic, financial and regulatory factors" in the coming months.

Overall outlook for the company remains subdued.

Of the £3.4 billion, £3.1 billion (RM16.30 billion) accounted for the write-down on the value of its investments.

However, JLR is also planning a programme to accelerate the business, which is focused on longer-term investment as legacy carmakers across the world transition from fossil fuel-powered vehicles to battery technology.

JLR has announced that its electric drive units are to be produced at its Engine Manufacturing Centre at the Wolverhampton site. It also plans to build a battery plant at Hams Hall in Birmingham, which will be operational by 2020.

Fresh from announcing a factory shutdown as a result of Brexit, Jaguar Land Rover could also now have its credit rating downgraded as a effect of Britain's impending exit from the European Union.

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