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Jaguar Land Rover posts record £3.6bn ($AU6.7bn) annual loss

Sky News logo Sky News 20/05/2019

Jaguar Land Rover (JLR) has reported a record annual loss of £3.6bn ($AU6.7bn) as sales remain weak in its core growth market, China.

a close up of a device: Jaguar Land Rover is owned by India's Tata Motors © PA Jaguar Land Rover is owned by India's Tata Motors

The company, owned by India's Tata Motors, has been at the centre of bid speculation since it recorded an accounting charge of £3.1bn ($AU5.7bn) in its third quarter related to muted demand in the industry.

a car parked in a parking lot: Jaguar Land Rover is feeling the effects of a slowdown in export markets such as China © PA Jaguar Land Rover is feeling the effects of a slowdown in export markets such as China

PSA - the owner of Peugeot, Citroen and Vauxhall - has not denied takeover talks with Tata as it seeks luxury brand opportunities to help it compete better with Germany's BMW and VW as carmakers shift to electric power.

Ralf Speth wearing a suit and tie in front of a car: Ralf Speth became chief executive of Jaguar Land Rover in 2010 © Sky News Screen Grab Ralf Speth became chief executive of Jaguar Land Rover in 2010

JLR said yesterday it was focused on the road ahead after a tough 12 months to 31 March.

It reported a pre-tax loss of £358m ($AU662) when one-off costs were stripped out.

The company largely blamed a 5.8% decline in vehicle sales - a figure that was led by China and continental Europe.

It reported rising sales in both the UK and in North America.

On a bottom line basis it said the £3.6bn ($AU6.7bn) loss also reflected redundancy costs associated with 4,500 job losses that were booked in the final three months.

The workforce hit is part of a transformation programme called Change that aims to make at least £2.5bn ($AU4.6bn) of investment, working capital and profit improvements by March 2020.

It said the plan remained on track and had already delivered the first £1.25bn ($AU2.3bn), with £150m ($AU277) of cost efficiencies, £400m ($AU740) of working capital improvements and £700m ($AU1295) of investment savings achieved by March 2019.

JLR has previously warned that a no-deal Brexit risks knocking the company's recovery off course - costing it up to £1.2bn ($AU2.2bn) annually.

Chief executive Dr Ralf Speth said: "Jaguar Land Rover is focused on the future as we overcome the structural and cyclical issues that impacted our results in the past financial year.

"We will go forward as a transformed company that is leaner and fitter, building on the sustained investment of recent years in new products and the autonomous, connected, electric and shared technologies that will drive future demand."

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