Jaguar Land Rover has posted a £3.4 billion (RM17.9 billion) loss for the fourth quarter of 2018, driven partly by sluggish sales in China and a reduction in the value of its plants and other investments.
The company had reported a net profit of Rs 1,214.6 crore in the October-December quarter of 2017-18.
However, the consolidated revenue for the quarter rose by 5 per cent to Rs 77,001 crore in the year-on-year period.
JLR's retail sales in China, which account for about one in every seven of its cars sold worldwide, fell by 40% year on year during the quarter, overshadowing growth in the United States and British markets.
Following the news, Tata Motors issued a warning that its JLR unit, will also suffer an operating loss in the year to March, a downgrade on its earlier forecast for the business which predicted that it would manage to breakeven.
The company added that it was taking decisive actions to make the business "Fit for Future" by stepping up competitiveness, reducing costs and improving cash flows.
Felix Brautigam, JLR chief commercial officer, said: "We have begun the new year with a stellar start in North America, achieving our best ever January sales and significantly outperforming the industry".
Net (after-tax) profit stood at Rs618 crore while earnings before interest, tax, dividend and amortisation (EBITDA) stood at Rs1,468 crore.
"The transition from the outgoing Range Rover Evoque and lower Discovery Sport sales in China impacted Land Rover sales, but we are encouraged by continued demand for the refreshed Range Rover and Range Rover Sport".
JLR, which has its engine manufacturing centre at the i54 to the north of Wolverhampton, and vehicle plants at Solihull, Castle Bromwich and Halewood in Merseyside, reported a £273 million pre-tax loss for the last three months of 2018.
In the United Kingdom there was an 0.9 per cent decline to 7,758.
JLR performance impacted by challenging market conditions particularly in China and inventory corrections. "The Turnaround 2.0 strategy is delivering well with a continuing portfolio of product launches, which are the requisite building blocks for sustainable growth", chairman N Chandrasekaran commented. "We continue to work closely with Chinese retailers to respond to current market conditions".
But analysts expect JLR to struggle to generate profit with China's economy projected to slow further this year after growth eased to its weakest pace in nearly three decades in 2018. This is expected to result in a one-time exceptional redundancy cost of around £200m. They are down 52% in the past year on concerns about Jaguar Land Rover's waning sales, profitability and high capital-expenditure requirements.
Jaguar Land Rover is under pressure on several fronts.