The rise and rise of Jaguar Land Rover has stalled after the economic slowdown in China saw sales slump by a third in the Far East.
China, which accounts for more than half of JLR's profits, according to some experts, has seen growth abate - and has started to clamp down on foreign car-makers.
The Midlands automotive giant is cutting prices in China in reaction to slowing demand in the world's biggest car market.
Its sales in China fell to 21,920 vehicles during the quarter while sales in Europe rose by 28 per cent to 28,878 vehicles.
Automotive expert David Bailey said the return in China was by far the most important for JLR, which now accounts for 90 per cent of income for parent firm Tata Motors.
Post columnist Prof Bailey said: "The news was not a great surprise. The profits slowdown was expected and shows, if anything, the bonanza in China is over and it is becoming like any other market.
"Last year, China accounted for 20 per cent of JLR sales but maybe as much as 80 per cent of the firm's profits.
"The stock market crash, the Shanghai Composite Index lost 14 per cent in July, and economic slowdown in China - economic growth is at its slowest for 25 years - are denting premium car sales after years of rapid growth.
"And, as I've noted before, there is pressure on pricing as the Government looks at the prices firms charge.
"In addition, the emergence of a second-hand market for cars has the effect of slowing the new car market."
According to China Association of Automobile Manufacturers (CAAM) figures, car sales in June fell 5.3 per cent.
CAAM had previously estimated sales would grow by some seven per cent this year - it has now trimmed that figure to three per cent.
JLR said this economic slowdown was to blame for its own decline, after selling 114,905 vehicles in the quarter to the end of June, down on the 115,596 in the same three months a year ago.
Revenue over the period fell 6.6 per cent, to £5 billion, while profit fell 30.9 per cent, to £638 million.
China has been clamping down on foreign car-makers, including fining Mercedes Benz £38 million for alleged price-fixing this year.
Some analysts believe the Chinese are not buying expensive foreign cars because people expect the competition authorities to force prices lower.
Profit at Mumbai-based Tata halved to £280 million, compared with the same period a year ago.
"The financial performance in the quarter was lower than the strong corresponding quarter last year due to softer sales in China, partially offset by strong performance in the UK, Europe and North America," the company said.
JLR said the decline "primarily reflects the weaker sales mix", hinting the company was selling a larger amount of its less-profitable cars as the actual number of vehicles purchased retreated by just 0.6 per cent.
Chief executive Ralf Speth said: "We have delivered solid financial earnings in this quarter despite a challenging macro-economic environment, particularly in China.
"These results are a testament to our balanced market presence in five international regions.
"Demand for our premium vehicles remains encouraging, fully justifying our continued strategy of investing in world-class technologies, manufacturing facilities, skilled employees and services."
