Saturday, 23 February, 2019

Jaguar Land Rover to Revamp Chinese Dealer Network After Loss

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Priscilla Morrison | 09 February, 2019, 11:06

JLR's China retail sales nearly halved in the December quarter as overall demand in the world's biggest auto market contracted past year for the first time since the 1990s.

Jaguar Land Rover, which is owned by India's Tata Motors, has embarked on a major restructuring programme to prepare for the future and boost profitability.

JLR's Chinese sales, which account for roughly one-in-seven of its global sales, fell 40 per cent year-on-year, which offset growth in the U.S. and British markets.

Sales in China fell 47% y-o-y last quarter offsetting 21% and 18.4% increase in North America and the United Kingdom respectively.

The company, which employs 18,500 manufacturing staff in the Midlands and Merseyside, last month said it will cut 4,500 jobs in response to the challenges.

Tata said JLR would post an operating loss in the year to March after having previously projected a breakeven.

Excluding the one-off accounting charge, JLR lost £273m before tax during the last quarter.

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Jaguar chief executive Ralf Speth said: "Jaguar Land Rover reported strong third-quarter sales in the United Kingdom and North America, but our overall performance continued to be impacted by challenging market conditions in China". This is Tata Motors' third consecutive quarterly loss as its luxury vehicle unit, Jaguar Land Rover (JLR) continues to struggle from Chinese slowdown and Brexit woes. -China trade tensions, low demand for diesel cars in Europe and Brexit worries, had tipped Tata into its first loss in three years in the quarter ended June 2018.

It follows downgrades for parent company Tata late a year ago.

JLR realised £500m of cash improvements through the "Charge" programme in the third quarter.

"JLR's margin level is likely to be marginally negative during FY19".

Of the £3.4 billion, £3.1 billion (RM16.30 billion) accounted for the write-down on the value of its investments. Total exports during the month stood at 3,270 units, a dip of 37 per cent as compared with the same period of last month due to the current liquidity crisis in Nepal, formation of new government in Bangladesh and political uncertainty in Sri Lanka, the company said.

Speth said: "This is a hard time for the industry but we remain focused on ensuring sustainable and profitable growth and making targeted investments that will secure our business in the future".

FILE PHOTO: The 2017 Land Rover Discovery is pictured at the 2016 Los Angeles Auto Show in Los Angeles, California, U.S November 16, 2016.

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