Luxury car brand Jaguar Land Rover has posted a quarterly pre-tax loss of £264 million, blamed partly on new tariffs in China.

The West Midlands manufacturer said its wholesale operations, which include its joint venture with Chinese state-owned firm Chery, sold 131,560 vehicles in the three months to June 30, 2018, a drop of five per cent year on year.

This also impacted its overall revenue for the quarter which was £5.2 billion, down 6.7 per cent year-on-year.

This was also its first quarterly loss in three years.

JLR said this had come in advance of the reduction in import duties in China from 25 per cent to 10 per cent on July 1 and production scheduling to de-stock inventories in other markets.

It was not all bad news as retail sales grew by 5.9 per cent to 145,510 vehicles, spurred by the popularity of its new Range Rover Velar, Range Rover Sport, Land Rover Discovery and Jaguar E-Pace.

JLR operates several factories across Birmingham and the wider West Midlands and has continued to invest in the region following the EU Referendum vote in 2016 when it was a vocal supporter of the remain campaign.

However, it announced in April that around 1,000 agency staff were to leave its factory in Solihull, prompted by a drop in demand and Brexit followed by news in June that production of the Land Rover Discovery would shift from the Lode Lane factory to Slovakia.

Jaguar Land Rover
Jaguar Land Rover

Chief executive Ralf Speth said: "We had a pre-tax loss in the first quarter, reflecting the impact of the announcement of the duty reduction in China as well as planned dealer stock reductions in the quarter.

"We also continue to be impacted negatively by uncertainty over diesels in Europe along with Brexit and additional diesel taxes in UK.

"Given these issues, we will remain focused on driving growth and simultaneously reducing costs and boosting operational efficiency and capability, taking the necessary steps to shape our future.

"We expect sales and financial results to improve over the remainder of the financial year, driven by continued ramp-up of new models, most recently the electric Jaguar I-Pace, and with the new lower duties effective in China."

JLR said it had continued to invest during the quarter, with £1.1 billion spent over the three months in new vehicles, next-generation automotive technologies and facilities to support its future growth.

The company plans to invest in the region of £4.5 billion in the current financial year, according to a statement on the financial results.

Mr Speth added: "We remain true to our pioneering spirit and our ability to create innovative and exciting cars that our customers will love.

"Given the success of recently introduced models such as the Jaguar E-Pace and the Range Rover Velar, along with our huge investment commitment in electrified technologies, we remain confident to deliver sustainable profitable growth."