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Jaguar Land Rover to Revamp Chinese Dealer Network After Loss

Only 18% of JLR’s outlets are in tier 1 cities like Shanghai and Beijing. 

Jaguar Land Rover to Revamp Chinese Dealer Network After Loss
A red Jaguar badge sits in the center of a wheel on their F-Pace automobile, produced by Tata Motors Ltd.’s Jaguar Land Rover unit. (Photographer: Chris Ratcliffe/Bloomberg)

(Bloomberg) -- Jaguar Land Rover owner Tata Motors Ltd. shocked investors on Thursday by writing down the value of its investment in the British carmaker by $3.9 billion -- mainly because of problems in its Chinese business.

Things haven’t gone well in the world’s biggest automobile market, based on an investor presentation posted to the JLR website. Sales dropped by 35 percent in the country for the nine months ended in December, sending Tata Motors shares down as much as 30 percent.

Jaguar Land Rover to Revamp Chinese Dealer Network After Loss

One problem, according to the presentation, is JLR’s dealer network. Only 18 percent of its outlets are in so-called tier 1 cities like Shanghai and Beijing, and more than one-third have been open for three years or less. The company said it’s overhauling the operation, cutting back on deliveries to reduce stock.

It’s also streamlined its commercial policies to help compensate for retailers’ losses, and launching extensive on-site training programs to improve the customer experience as well as operations.

JLR didn’t offer details of the writedown, other than to say it was about evenly split between intangible items such as technology and branding, and property, plant and equipment. JLR isn’t closing any facilities, according to a spokeswoman.

To contact the reporters on this story: Christopher Jasper in London at cjasper@bloomberg.net;Irene García Pérez in London at igarciaperez@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

©2019 Bloomberg L.P.

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