Jaguar Land Rover has reported a drop in profits after slower sales growth and rising business investment. Annual pre-tax profits fell to £1.5bn from £1.6bn the year before, and fourth quarter profits almost halved from £676m to £364m. Annual sales grew 1.7%, helped by strong demand in China.
But it blamed a sharp fall in UK sales on “consumer uncertainty surrounding diesel models, Brexit and vehicle taxation”.
UK sales dropped 12.8% to 108,759 cars, while European sales also fell. However, overall car sales in the year to 31 March increased 1.7% to 614,309 cars compared with the previous year, reports BBC.
That is a sharp slowdown in growth from 2016/17 when overall sales grew 15.8%. China was a bright spot last year. Sales there jumped 19.9%, while North American and sales grew 4.7%.
Jaguar Land Rover chief executive Ralf Speth said: “Strong demand in our key overseas markets has offset the challenging conditions in the UK and other parts of Europe.”
He said that heavy investment in “new vehicles, manufacturing facilities and next-generation automotive technologies” will continue.
In April, the firm said it would shed 1,000 contract staff at two UK factories after uncertainty over Brexit and changes to taxes on diesel cars.
Jaguar Land Rover, which is the UK’s biggest carmaker, is owned by India’s Tata Motors.
The Indian car giant said its fourth quarter net profit had halved to 21.25 billion rupees (£233.25m, $310.74m), from 42.96 billion rupees a year earlier, missing analyst expectations.
“In the near-term, the challenges of market, technology and geo-political uncertainties are likely to persist,” Tata Motors Chairman Natarajan Chandrasekaran said in a statement.