Coventry, England – Jaguar Land Rover racked up a record loss after diesel sales slumped – but the company still insists that it is not trying to merge with French firm Peugeot.
Britain’s largest car maker swung to a £3.6bn (R66bn) loss for the year ended March 31.
This was mostly due to a £3.1bn (R56.7bn) write-down in the value of its investments in the third quarter, after demand for some of its newer models plunged.
Around half of this was because existing investments such as factories, equipment and car designs are worth less than previously hoped due to the problems faced by the industry. And the rest was money wiped off in an accounting correction because the firm expects to earn less in coming years than it previously expected.
It came as sales for cars such as Jaguar sedans halved compared with the same period the year before.
The company has struggled with plunging demand in China – made worse due to the US-China trade war triggered by President Trump – and drivers ditching diesel cars since the Volkswagen emissions scandal emerged in 2015. Much of its range is diesel-powered.
It did not provide an update about widespread rumours that its parent company, Tata Motors, is planning to sell a stake in JLR to the French company PSA Groupe, which is behind Peugeot.
But a board member denied the rumours, saying: "Every two weeks this comes out. Every two weeks we make the same comment. There is no truth to these rumours. We do not comment on speculation."
JLR, which was bought by India’s Tata for £1.2bn (R22bn) in 2008, said the situation is starting to improve.
It made a £120m profit in the last three months of the financial year. The company – which employs about 40 000 people in the UK – put this down to huge rounds of cost-cutting paying off after it announced plans to axe 4500 jobs earlier this year.
Chief executive Ralf Speth said JLR has been one of the first companies in its sector "to address the multiple headwinds simultaneously sweeping the automotive industry". He claimed that JLR’s turnaround plan has already saved £1.3bn (R23.8bn).
Full-year revenue came in at £24.2bn (R444bn), down from £25.8bn the year before. It sold 6 percent fewer vehicles, or 578 915, which it put down to weakness in China.
But the company said it is seeing solid sales for several of its new cars, such as the Jaguar E-Pace and Range Rover Velar.
Tata Motors’ finance chief, Pathamadai Balachandran Balaji, said he expects Chinese sales of its Jaguar saloons and Land Rover SUVs to return to growth later this year. JLR had made a profit of £1.5bn (R27.5bn) in its previous financial year, 2017/18.