Jaguar Land Rover’s 2015-16 pretax profit set to halve1 min read . Updated: 01 Mar 2016, 07:29 PM IST
JLR has been hit by sliding sales in China, a blaze at the port of Tianjin and heavy spending on new sites and models
Geneva: Luxury carmaker Jaguar Land Rover will post lower fourth-quarter profit than a year earlier, its chief executive told Reuters, leaving its full-year pretax figure at around half of the £2.6 billion ($3.6 billion) made in 2014/15.
The firm, owned by India’s Tata Motors Ltd, has been hit by sliding sales in China, a blaze at the port of Tianjin and heavy spending on new sites and models.
In an interview at the Geneva car show, Ralf Speth said the Britain-based brand would fall short of the almost £400-million profit posted in January-March 2015.
“It was a sensational quarter (in 2015) ... We will not achieve (that)," he said.
In the first three quarters of the current financial year, Jaguar Land Rover (JLR) made a pretax profit of just under £1 billion, meaning the annual total is set to come in at around half of 2014-15’s level.
JLR had previously said it expected a lower profit this financial year, without giving details.
The firm took a £245 million charge in its second quarter after up to 5,800 cars were damaged or destroyed by an explosion at the Chinese port of Tianjin, though it has since recouped a small portion of the money in insurance and hopes to receive more.
Speth said China, once the carmaker’s fastest-growing market but which has seen growth slow sharply as the economy cools, was showing signs of revival.
JLR’s third-quarter retail sales fell 10% in the world’s biggest car market, but January volumes were up 5%.
“China has seen the bottom and is bouncing back and therefore I am cautiously optimistic that we will see a stronger performance," Speth said.
Tata bought both the Jaguar and Land Rover brands in 2008 and has ploughed billions into the two marques, with Jaguar launching the F-Type SVR coupé on Tuesday, the latest in a series of new models to refresh and widen its line-up.
JLR, which built almost one in three of the 1.5 million cars Britain made last year, also warned there would be great uncertainty were Britons to vote to leave the European Union in a referendum on 23 June.
“We will not have free and fair trade, or it will take years to come to new contracts and new tax schemes," Speth said. Reuters