Jaguar Land Rover slumps to £3.6bn loss amid Chinese sales slide
Jaguar Land Rover crashed to a £3.6 billion annual loss as it was weighed down by a slump in Chinese sales.
The luxury car manufacturer, which announced 4,500 job cuts earlier this year, was heavily dragged down by a £3.3 billion writedown in the third quarter.
It slumped from a £400 million profit in the previous financial year as it was hit by the economic slowdown in China.
Weakness in the Chinese car market, which was cited as a key reason for job losses, resulted in a 5.8 per cent decline in sales to 578,915 vehicles in the region.
However, the firm, which has its £1 billion engine manufacturing centre at the i54 to the north of Wolverhampton, was positive about recent sales after it delivered a £120 million pre-tax profit in the fourth quarter to March 31 following nine months of losses.
JLR was also optimistic about unit sales in the UK and in north America, which jumped 8.4 per cent and 8.1 per cent respectively during the year.
Full-year revenues fell 5.6 per cent to £7.1 billion, as growth in the US and UK was offset by "weaker Chinese market conditions".
The company launched a £2.5 billion turnaround programme earlier this year and has spent more than £149 million on redundancy costs to date.
The turnaround programme has already delivered £1.25 billion in cost savings and efficiencies, JLR said.
Chief executive Dr Ralf Speth said: "Jaguar Land Rover has been one of the first companies in its sector to address the multiple headwinds simultaneously sweeping the automotive industry.
"We are focused on the future as we overcome the structural and cyclical issues that impacted our results in the past financial year.
"We will go forward as a transformed company that is leaner and fitter, building on the sustained investment of recent years in new products and the autonomous, connected, electric and shared technologies that will drive future demand."
Deepening losses come after it was reported earlier this month that PSA – the owner of Peugeot, Citroen and Vauxhall – was eyeing up a deal to acquire the luxury car manufacturer.
Work is underway at Gaydon in the UK to centralise JLR’s automotive design and product engineering activities. New technology centres have been created in Shannon in Ireland, Manchester and in Budapest, Hungary.