Jaguar Land Rover Loses £3.4 Billion in Q4 2018

JLR attributes the drop in fourth-quarter 2018 sales and profit to a decline in sales in the Chinese market, which negated a slight rise in sales in Europe and the U.S.

Greg Kable, Contributor

February 8, 2019

1 Min Read
JLR’s past investments in diesels unlikely to be recouped, industry-watchers say.
JLR’s past investments in diesels unlikely to be recouped, industry-watchers say.

Jaguar Land Rover announces a pretax loss of £3.4 billion ($4.4 billion) for the final three months of 2018.

The shortfall includes a one-time £3.1 billion ($4 billion) charge from the Coventry, U.K.-based automaker adjusting the value of its capitalized investments.

JLR says half of the charge was due to an accounting acknowledgment that investments in machinery and plants were worth less than previous calculations suggested.

The remaining half comes from lowering the value of past investments in product development and engineering, a recognition from the automaker that it is unlikely to reclaim previous investments with future sales.

Financial analysts conclude the recognition is that previous investment in diesel engines, which have underpinned JLR sales in many key markets, will not be recouped due to a rapid decline in global diesel sales, most notably in Europe.

Excluding the charge, the automaker posted a £273 million ($353 million) one-time pretax loss between October and December 2018, against revenue of £6.2 billion ($8.0 billion).

Sales of Jaguar and Land Rover vehicles totaled 144,602 units in fourth-quarter 2018, down 9,845 compared to a year earlier.

The £273 million loss compares to a £90 million ($116 million) loss in the previous quarter of 2018, running from July until September.

JLR attributes the drop in sales and profit to a decline in sales in the Chinese market, which negated a slight rise in sales in Europe and the U.S.

Chairman Ralf Speth says the charge made during fourth-quarter 2018 was part of a recently announced transformation plan called Charge and Accelerate. It has been conceived to modernize JLR and streamline its operations. In announcing the loss, Speth confirms £500 million ($647 million) of cash improvements already had been booked through measures introduced as part of the Charge and Accelerate scheme.

 

About the Author

Greg Kable

Contributor

Greg Kable has reported about the global automotive industry for over 35 years, providing in-depth coverage of its products and evolving technologies. Based in Germany, he is an award-winning journalist known for his extensive insider access and a contact book that includes the names of some of the most influential figures in the automotive world.

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