Jaguar Land Rover (JLR) will post a lower pre-tax profit in 2015 than in the previous fiscal year, its CEO has said, due to major investments and an explosion at China's Tianjin port that destroyed thousands of its cars.
The company, which said on Tuesday it will invest nearly half a billion pounds in its British engine manufacturing centre, saw up to 5,800 cars damaged or destroyed in a chemical explosion at Tianjin in August, Reuters noted.
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JLR booked a pre-tax loss of GBP157m in the three months to the end of September, weighed down by a charge due to the blast. This led parent Tata Motors to post a surprise net loss for the period, due partly to a fall in sales in China.
JLR's chief executive Ralf Speth told Reuters in an interview that he did not expect his company to match the GBP2.61bn (US$3.95bn) pre-tax profit it made in 2014/15.
"We will have this year a lower profit number than last year," he said.
"It's (because of) the investments number and this … very special event in China."
Speth said thousands of the company's vehicles caught up in the Tianjin explosion "cannot be repaired" but that the firm was unsure at this point as to the state of the rest of them.
China was Jaguar Land Rover's fastest growing market in 2014 and Speth said demand in the world's biggest car market was returning after the company saw sharp declines in sales earlier this year.
"We see that growth is coming back to China and therefore we are cautiously optimistic," he said.
