The U.K. car manufacturer Jaguar Land Rover has reported a £90 million pre-tax loss in profits with poor sales figures resulting in Q2 revenues falling to £5.6 billion, a drop of 10.9%.

The recent poor sales figures and financial results have seen the car manufacturer commence a major £2.5 billion capital deployment, with the aim of turning around the company’s financial situation within the next 18 months.

Industry Wide Issues

The CEO of Jaguar Land Rover, Ralf Speth, has pinned the poor second-quarter results on the difficult market conditions that are being felt across the whole industry.

The Chinese automobile market has slowed significantly, while prolonged uncertainty over the future of diesel, the effect of Brexit, and the changeover caused by WLTP (Worldwide Harmonised Light Vehicles Test Procedure) has affected the European market.

Trade War Dents Demand

Jaguar Land Rover has claimed recent changes to import duty and the ongoing tensions over trade between the U.S. and China are the causes of the poor sales results in the Chinese market.

While the demand for SUVs has been stable in the U.S. market, an overall decline in demand for passenger cars has affected sales figures for Jaguar Land Rover and the U.S. car manufacturing industry as a whole.

The European market has also seen a slump in sales for Jaguar Land Rover. The demand for diesel cars has been greatly affected by the new WLTP regulations on emissions. The U.K. has seen the largest drop in sales figures with concerns over the impact of Brexit and new taxation on diesel cars adding to the car manufacturer’s poor financial performance in the country.

Tata View

The UK car manufacturer was purchased by the Indian automobile giant Tata Motors in 2008, with the company paying over $2.3 billion to Ford Motor Company to complete the purchase.

Chairman of Tata Motors, Natarajan Chandrasekaran, has announced a comprehensive plan to combat the external factors that have impacted Jaguar Land Rover’s financial performance. The changes will be implemented with the aim of drastically improving cash flow and profitability and delivering an overall boost in performance of Jaguar Land Rover by the second half of the 2019 financial year.

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