Jaguar Land Rover has reported a £3.4bn loss for the third quarter of its financial year as demand for its luxury cars continues to slow in China.
That includes a £3.0bn write-down of the value of its property, plant and equipment, which the Coventry-based company said “reflects lower than planned sales, decline in demand for diesel and wider industry issues”.
Stripping that out, pre-tax losses for the quarter ended 31 December widened to £273mln. That compares with a profit of £192mln in the year-ago period and a loss of around £90mln in the second quarter of its current financial year.
JLR, which is owned by Indian giant Tata Motors Limited (NYSE:TTM), sold 144,602 vehicles in the period – down from 154,447 a year ago – and blamed “continued challenging market condition in China” for the drop-off.
And while the manufacturer praised the “encouraging growth” it had seen in its North American and UK businesses, it confirmed that its £2.5bn costs-saving plan is on track.
‘Perfect storm’ denting sales
As part of those cost cuts, JLR revealed last month that it is axing 5,000 jobs from its 40,000-strong UK workforce as it battles a downturn in Chinese sales, a slump in demand for diesel-powered cars and concerns over UK competitiveness post-Brexit.
The company is particularly exposed to the first two points. China is its most profitable market but sales have halved in recent months as Chinese buyers hold back on big-ticket purchases amid the global trade tensions.
It is also one of the most heavily-exposed carmakers to the declining demand for diesel cars in the wake of Volkswagen’s emissions scandal.