Jaguar Land Rover posts £3.4bn loss as China demand slips

Irving Hamilton
February 10, 2019

However, it also recorded a £3.1 billion impairment charge as it wrote down the value of its plants and other assets, citing muted demand and technological and regulatory headwinds. The staggering loss comes even as its domestic business seems to have achieved a turnaround, with standalone profits almost tripling from Rs 211.59 crore for the same period of past year to Rs 617.62 crore. CNBC-TV18 Polls had predicted a profit of Rs 541 crore for the quarter under review.

By 2040, more than half of all new auto sales and a third of the planet's automobile fleet - equal to 559 million vehicles - will be electric, according to Bloomberg NEF.Tata Sons Chairman N Chandrasekaran said market conditions continue to be challenging, particularly in China.

Net (after-tax) profit stood at Rs618 crore while earnings before interest, tax, dividend and amortisation (EBITDA) stood at Rs1,468 crore.

JLR's China joint venture company reported a net loss of GBP 30 million, versus a year ago profit of GBP 51 million.

Global ratings agency Fitch Ratings has placed Tata Motors Limited's long-term issuer default rating of "BB" on Rating Watch Negative (RWN) to reflect the increasing risks of a disorderly Brexit for its fully-owned subsidiary Jaguar Land Rover Automotive plc.

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JLR announced last month that it was axing 4,500 jobs worldwide and earlier this week credit rating agency Fitch placed it on a negative watch.

JLR said its performance was as a result of "continued challenging market conditions" in China which were partially offset by "encouraging growth" in North America and the UK. But, analysts still remain positive and expect the domestic passenger vehicle business, which continues to improve and the cost reduction measures implemented at JLR to possibly drive it out of the rough patch. "With these interventions, we are building Tata Motors group to deliver strong results in the medium term".

But analysts expect JLR to struggle to generate profit with China's economy projected to slow further this year after growth eased to its weakest pace in nearly three decades in 2018.

JLR is also launching new versions of its Range Rover Evoque and Land Rover Defender models this year as it tries to stay on the front foot with its product portfolio even as it cuts back on spending.

The company is in track with investment in electrification with Electric Drive Units to be produced at the Engine Manufacturing Centre and a new Battery Assembly Centre to be established in the United Kingdom, it added.

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