Jaguar Land Rover (JLR)’s UK sales kept steady in the three months to September, as the carmaker reported a £90m loss due to plummeting China sales and high operating expenditures.
Sales in Britain totalled 29,679 units in the quarter, down by around 200 unit year-on-year. The brand’s sales held up strongly considering the country’s car retail volumes dropped over 10% over the quarter.
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The UK was the most resilient among JLR’s markets. Sales in China – the main driver of expansion for JLR and other European OEMs in recent years – dropped 43.8% to 21,096 units. North America volumes shrunk 4.6% to just above UK levels.
Sales in Europe, where new testing emission procedure WLTP has been taking a toll on many carmakers’ deliveries, dropped 11.9% to 25,485 units.
JLR mentioned WLTP and “continued diesel weakness in Europe and the UK” as one of the reasons for the drop in sales in the two regions. In Britain, it said this had been “exacerbated” by a market slowdown and an inflation rate above target due to Brexit-induced devaluation of the pound.
The company reported £5.6bn in revenues, a drop of £687m year-on-year, which it attributed primarily to China. Expenses weighting on the negative profit line included £39m in warranty provisions, £102m due to higher material and new plant costs, and £74m due to depreciation and amortisation.
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By GlobalDataJLR’s warnings has been among the most vocal from manufacturers over the risk of job losses from a “no-deal” Brexit. The company shifted some of its production to Slovakia to hedge against a scenario where components from the EU may be delayed at the border, and has temporarily shut down plants in Britain in order to save costs and fight oversupply.
The carmaker – whose vehicles are financed by Lloyds’ Black Horse in Britain – presented investors with a “comprehensive action plan” that included “close collaboration with the retailer network to ensure a healthy development
for the future”, and “prompt actions to balance supply and de,and in response to market conditions and otherwise escalating incentives”.
