Jaguar Land Rover took a huge hit in China last year.
Tata Motors, parent company to Jaguar Land Rover, shocked the markets Thursday when JLR posted a pre-tax loss of $4.4 billion last quarter. The company’s sales have slumped lately, particularly in China, sending Tata’s shares plunging as much as 30 percent. In December, sales in China nearly halved as the nation’s automotive market contracted for the first time in two decades. According to India Times, it was the worst reported loss in Indian corporate history.
That number is a bit more nuanced than it sounds. While the company’s sales were down in the last quarter, the lion’s share of that hit came from its decision to adjust the value of its non-cash assets, including its manufacturing plants and cars, by 3.1 billion pounds ($4 billion). Taking that adjustment out of the equation, JLR posted a 273 million pound ($354 million) loss in Q4 of 2018.
Dr. Ralf Speth, Jaguar Land Rover’s CEO, noted the slow-down in the industry that’s affecting the company’s bottom line. “This is a difficult time for the industry,” he said. “..but we remain focused on ensuring sustainable and profitable growth, and making targeted investments, that will secure our business in the future.”
‘Encouraging growth’ in North America and Europe
JLR reported sales were improving in North America and Europe, which slightly offset the loss in China. The company lays the drop in sales at the feet of “continued challenging market conditions” in China, exacerbated by recent trade conflicts. Out of 13 models the company offers, only four grew last year. The electric I-Pace and entry-level E-Pace crossover fared well. So did the Range Rover and Range Rover Sport.
This report comes after Jaguar Land Rover announced it would cut 4,500 jobs as part of a cost-cutting strategy. As the automotive market slows down, several automakers are looking to cut costs and boost their bottom line, or stem the losses. The company says it remains committed to its electrification plans, despite the major losses last quarter.
In a statement, the company said it “continues to invest in exciting products, electrification, and technology. Most recently, it launched an all-new Range Rover Evoque. The new Land Rover Defender will be revealed later this year.”