Revenues are down 6.7% compared with last year; company CEO blames upcoming change in Chinese import duty, Brexit and diesel uncertainty
Jaguar Land Rover (JLR) has posted a pre-tax loss of £264 million for the first quarter of the 2018/2019 financial year.
The downturn, which includes a 6.7% drop in revenues over the same period last year, as well as a fall in wholesales, has been blamed by company boss Ralf Speth on market hesitance in China, following the import duty reduction announcement. The ongoing concerns around Brexit and the backlash against diesel were also pinpointed in Speth’s statement.
Speth said: “We had a pre-tax loss in the first quarter, reflecting the impact of the announcement of the duty reduction in China as well as planned dealer stock reductions in the quarter. We also continue to be impacted negatively by uncertainty over diesels in Europe, along with Brexit and additional diesel taxes in the UK.”
Speth has previously warned about Brexit, saying that in a worst-case scenario, the company would have to withdraw from the UK, given the additional costs a hard Brexit could necessitate.
Chinese customers are also likely to have stepped back from buying ahead of the country’s reduction in duty on foreign cars, effective from 1 July. The move reduces import duty from 25% to 10%.
Speth continued: “Given these issues, we will remain focused on driving growth and simultaneously reducing costs and boosting operational efficiency and capability, taking the necessary steps to shape our future. We expect sales and financial results to improve over the remainder of the financial year, driven by continued ramp-up of new models”. The reduced duty in China is also expected to boost sales post-July.
JLR‘s UK sales downturn across the first few calendar months of 2018 slowed in June, with the exact same number of Jaguars sold across the month compared with June 2017 and Land Rover sales falling by just 2.9%. Across the year to the end of June, Jaguar’s UK registration total was almost 11% down on 2017 and Land Rover’s was down more than 9%.
China makes up almost a quarter of JLR’s total global sales.