The British premium brand has just reported its financial results for the fiscal year ended on March 31 and its profits significantly dropped.
The chief executive of Tata-owned Jaguar Land Rover warned earlier in March that the British automaker would not be able to match the record profit made last year. And the financial results for the fiscal year 2015/2016 confirm Ralf Speth’s expectations. While the vehicle retail sales rose 13 percent to 521,571 units, breaking the half-million mark for the first time, profit before tax was 1.56 billion British pounds (2.28 billion dollars), down from the record 2.6 billion pounds last year (3.8 billion dollars).
There are various factors behind such a fall, primarily reflecting market conditions during the first half of the year, especially in China, where the brand’s sales have dropped. The explosions at the Tianjin port also had a significant impact. Everything was over-complicated by the high costs associated with the expansion of the brand’s lineup and its facilities and by some recall expenses in the United States over the potentially faulty airbags supplied by Takata.
However, the last quarter brought some relief, as profit before tax was 577 million pounds, up by 181 million pounds compared to the same period of 2014/15. In the last three months of the financial year, retail sales grew by 28 percent, to 158,813 vehicles and Jaguar Land Rover said it would continue the push for an expansion. It also plans to invest 3.75 billion pounds in its operation in UK during this year, to boost its global production capacity and to bring more models, such as the Jaguar F-PACE and the Range Rover Evoque Convertible.