Jaguar Land Rover profits down almost 50%

Jaguar Land Rover's quarterly profits have tumbled by 49% as it counted the cost of launching a new model and the impact of volatility in the currency markets.

Britain's biggest car maker, which is owned by India's Tata Motors (BSE: TATAMOTORS.BO - news) and employs 25,000 people in the UK , saw revenues grow 13% to £65.5bn between October and December.

But the company's profits before tax fell to £255m during the three month period, compared to £499m for the same period last year - a drop of 49%.

It pointed to costs associated with the upcoming launch of the new Land Rover Discovery model, due to be rolled out this spring, and to "unfavourable" exchange rates for the decline.

But it notes that these costs have been partially offset by money it has recovered following the explosion at the Port of Tianjin in China in 2015, which killed 173 people and injured hundreds of others.

Jaguar Land Rover issued a profit warning after the disaster, which damaged or destroyed 5,800 of its cars worth more than £300m.

Sales were up 8.5% in the three months to December, reflecting a surge in demand in China as well as growth in North America and Europe.

Land Rover sold 104,000 vehicles, 9% down on the same period last year, as an old Discovery model was phased out.

But a total of 45,000 Jaguar cars were sold, a rise of 90%.

The biggest rise in sales was seen in China, where the firm registered a 38% increase, followed by a 20% jump in the US and Canada and a 7% boost in the European market.

Commenting on the figures, Dr Ralf Speth, Jaguar Land Rover CEO, said: "Continuing expansion and innovation in our compelling product range have driven up global revenues and retail unit sales, led by the Jaguar F-PACE (LSE: 4031.L - news) , Jaguar XF, and Land Rover Discovery Sport.

"Models such as the all-new Discovery mark the latest step in our investment programme, which will underpin long-term profitable, sustainable growth."