MUMBAI -- Jaguar Land Rover reported its first profit in four quarters to raise optimism that the struggling UK automaker is on the mend.
Net income was 119 million pounds ($151.6 million) in the three months ended March, Jaguar Land Rover said in a statement on Monday, while profit before tax, excluding exceptional items, was 269 million pounds.
JLR made a loss of 3.6 billion loss for the full year to March after a large writedown in the third quarter.
Tata Motors expects JLR to return to profit this financial year helped by cost cuts and a recovery in Chinese demand, it said on Monday.
Tata Motors finance chief, P.B. Balaji, told reporters he expected Chinese sales to return to growth "a quarter from now." JLR has "managed to stabilize" in China after removing surplus inventory, he said.
While the latest results are encouraging for JLR, its struggles in China persist as sales tumbled 46 percent in April, raising questions as to how long Tata Motors will hang on to what was once its crown jewel.
No sale
Reports have said that Tata is exploring strategic options for the luxury brand, including a potential sale to PSA Group. Balaji said on Monday that Tata was not looking to sell the unit.
Jaguar Land Rover announced 4,500 job cuts globally in January as part of a 2.5 billion-pound savings program. The cost-cutting drive has yielded 1.25 billion in savings so far, JLR said.
The automaker faces other challenges besides China. It is particularly vulnerable to the shift away from combustion and diesel engines, and its strong historic links to the UK have fueled concern over what a disruptive Brexit could bring.
Separately, JLR’s Chief Financial Officer Ken Gregor will step down after 11 years in the post to be replaced by current Chief Transformation Officer Adrian Mardell, the carmaker said.
JLR has also been struggling with quality problems.
A J.D. Power U.S. survey of 31 brands in June 2018 put them in the bottom two slots. Jaguar had 148 problems per 100 vehicles and Land Rover racked up a dizzying 160. Top-ranked Genesis, the luxury brand of Hyundai, had 68.
Land Rover still ranks as the most valuable of the major brands owned by Tata Group, which also controls Tetley tea and New York’s luxury Pierre hotel. The automotive marque was worth an estimated $6.2 billion last year, according to Interbrand.
Reuters contributed to this report
