Jaguar Land Rover’s Indian owner, Tata Motors, was dragged to a quarterly loss by China’s economic slowdown and a huge fire in the Chinese port of Tianjin that destroyed nearly 5,800 cars. Pre-tax earnings in the three months to September 30th were GBP 154million, compared with GBP567m in the same period of the previous year.
Tata fell to a loss of GBP 112million when factoring in the GBP 245milion cost of the vehicles lost in the major industrial explosion and fire that killed more than 150 people in August. It will be “some months” before it can get the money back from insurers, Tata Motors said.
The automotive company, part of the Indian conglomerate Tata, added that it had also been affected by weaker Chinese sales and the impact of foreign exchange movements.
Jaguar Land Rover (JLR) sales, reported separately from the rest of Tata Motors, grew slightly to GBP4.8billion, helped by a 30% increase in the UK and a 65% rise in the US. The luxury division sold 111,160 cars, compared with 110,200 in the same quarter last year.
But JLR also felt the pinch of unfavourable currency movements, and its pre-tax profits tumbled from GBP609m in the previous year to GBP88m before one-off items.
Including the charge for vehicles written off in the Tianjin fire, JLR fell GBP157million into the red. But the firm’s luxury division pointed to its best ever October sales as a reason for optimism. It sold a record 41,553 cars last month, a 24% surge on the previous year, boosted by the popularity of the Jaguar XE and Land Rover Discovery Sport. China also showed signs of recovery, with sales up during the month.
Dr Ralf Speth, JLR’s chief executive, said: “We are continuing to execute on our sustainable growth strategy, despite headwinds caused by currency fluctuations, an exceptional charge and softening of the Chinese market.” He added that new and upgraded models introduced during the first six months of the year should deliver a “solid second half”.
In the standalone Tata Motors business, excluding JLR, the company reported a pre-tax loss of GBP28million.
