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Jaguar Land Rover (JLR) saw revenues for its second quarter (Q2) fall my 10.9% to £5.6 billion because of poor sales, which has resulted in the car maker suffering a pre-tax profit loss of £90 million.
The poor showing in its most recent set of financial results, has prompted the car manufacturer to launch a £2.5 billion turnaround programme with the capital deployed over the next 18 months with the aim of rectifying the situation.
‘In the latest quarterly period, we continued to see more challenging market conditions,’ JLR CEO Ralf Speth said. ‘Our results were undermined by slowing demand in China, along with continued uncertainty in Europe over diesel, Brexit and the WLTP [Worldwide harmonised Light Vehicles Test Procedure] changeover.’
‘We remain focused on delivering improved profitability and cashflow in the second half, while pressing ahead with our product offensive,’ he added.
Trade tensions and declining demand
JLR blamed its poor sales in China on the country suffering from uncertainty following import duty changes and growing trade tensions with the US.
In North America, consumer demand for SUVs has stayed strong, but JLR still had its sales figures hurt by a general slowing in orders of passenger cars – something that the whole industry is having to contend with, the company said.
In Europe, where there is ongoing weakness in diesel car demand and the implementation of new WLTP rules on emissions, JLR has seen sales slump. The impact of diesel taxation and new regulations on the car manufacturers sales was most pronounced in the UK, with the ongoing uncertainty around Brexit adding to the company’s problems.
‘In JLR, market conditions, particularly in China, have deteriorated further,’ Tata Motors Chairman Natarajan Chandrasekaran said. ‘To weather this volatile external scenario, we have launched a comprehensive turnaround plan to significantly improve our free cash flows and profitability.’
‘The leadership team at JLR is in mission mode to achieve the deliverables under this plan,’ he added. ‘With these concerted actions we remain committed to deliver an improved all-round performance from H2 FY 19.’