Jaguar Land Rover (JLR) boss Ralf Speth says the firm will launch a series of cost and cash flow improvement programmes to boost profits after posting a pre-tax loss of £90 million in the previous financial quarter.
The British firm says that lower sales, primarily in China, were the key reason for the result. JLR sold 129,887 vehicles between July and September – a 13.2% decline on the same period last year, resulting in revenues of £5.6 billion.
JLR said the bulk of the slump in sales was due to the market conditions in China, where the recently begun trade war with the US has created consumer uncertainty.
European and UK sales were also down, for which JLR cites the combined impact of the fall in diesel demand, the introduction of the WLTP emissions regulations and the uncertainty over Brexit. Speth has been outspoken on the impact that Brexit has already had on the company.
In response to those challenges, Speth said JLR “has launched far-reaching programmes to deliver cost and cash flow improvements”. He added: “Together with our ongoing product offensive and calibrated investment plan, these efforts will lay the foundations for long-term sustainable, profitable growth.”
JLR said that the initiatives would deliver profit, cost and cash flow improvements totalling £2.5bn over the next 18 months, in part by reducing planned spending in the next two financial years by £500m to £4bn.
It added that it expects its financial performance to improve in the next two financial quarters and anticipates pre-tax profits for the current financial year to “be about break-even”.