Jaguar Land Rover Profits Decline in US and Europe
Tata Motors, parent company of the Jaguar Land Rover, reported lower profits in three months going to December which is caused by poor sales in Europe and North America.
A decline of 3.4 percent and 2.4 percent for Europe and North America respectively had so much impact, resulting to a weaker fourth quarter net income for Tata in 2017, which is at £189 million (around $265 million). That’s far from Bloomberg’s estimate of £261 million (around $366 million).
While that looked like a downward trend, a stronger year-on-year sales was still achieved in the United Kingdom, with Jaguar hitting 20 percent and Land Rover reaching 18 percent growth. January 2018 results, however, are not looking well as Jaguar went down by 19.3 percent. Land Rover, on the other hand, saw growth of 4.3 percent.
“We have delivered credible financial results in a challenging period, during which JLR has continued to over-proportionally invest in long-term growth and autonomous, connected and electric technologies. Despite headwinds and uncertainty in some markets, JLR still delivered increased unit sales as we continued the launch schedule for new models,” CEO Ralf Speth stated.
Jaguar Land Rover’s output at the Halewood plant will have to be cut due to the slow sales. A JLR spokesperson have linked this to the issue about Brexit and how customer are getting confused over diesel.
Another thing that might have contributed to the slow sales is is the delivery slowdown of the Evoque and Range Rover Sport. An upgraded model of the Range Rover Sport commenced deliveries this month, while an upgraded Evoque comes in 2019.
“JLR has delivered another record-breaking year in vehicle sales in what is now the seventh year of successive growth for Britain's largest car manufacturer,” the spokesperson explained. “However, the automotive industry continues to face a range of challenges which are adversely affecting consumer confidence.”
Andy Goss, the sales boss of JLR, says the diesel car taxes that just got introduced are rather “counterintuitive.” It applies to any car that fails to pass the Real Driving Emissions (RDE) step 2 real-world testing standards, which becomes formalized in the year 2020. As such, no vehicle is safe from this tax as of yet, although the tax takes effect by April.