Published: Fri, November 02, 2018
Economy | By

Jaguar Land Rover undergoes $3.2 billion turnaround plan as sales slump

Jaguar Land Rover undergoes $3.2 billion turnaround plan as sales slump

To help counter the fallout over diesel, the Jaguar I-Pace, the firm's first all-electric vehicle, is just going on sale.

Jaguar Land Rover wants to cut costs by £1 billion in the next 18 months, reduce investment in new models and technologies by £500 million to £4 billion in this financial year and next, and trim inventory and working capital by £500 million.

He added: "Together with our ongoing product offensive and calibrated investment plan, these efforts will lay the foundations for long-term sustainable, profitable growth".

The company posted a consolidated net loss for the second straight quarter, as a steep slide in China sales at its Jaguar Land Rover unit masked continuing turnaround in India.

In the near term it will improve efficiency in areas including purchasing and material cost, manufacturing and logistics and people and will focus on strategic and non-core asset sales. It has also reduced its number of production days at two of its United Kingdom factories - Castle Bromwich and Solihull.

Britain's biggest carmaker, owned by Indian conglomerate Tata, booked a £90 million pre-tax loss in the three months to September 30, which compares to a £385 million profit in the same period past year.

That was worse than the estimate of a loss of Rs 240 crore, according to Refinitiv data.

The poor performance has resulted in a pretax loss of $116 million for Jaguar Land Rover.

The measures come on the back of falling sales that have pushed the company into third quarter losses of £90m, compared to profits of £382m in the same period a year ago, with Chinese demand slumping amid escalating trade tensions with the US.

Tata Motors' domestic business reported a profit of 1.09 billion rupees and EBITDA margin rose 210 basis points to 8.7 percent during the quarter from a year ago.

The automaker incurred a one-off charge of $59 million attributed to the closure of operations at its Thailand-based subsidiary.

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