Jaguar Land Rover posted a quarterly loss as higher incentives in China and Europe's diesel slump hit earnings.
JLR reported a loss of 210 million pounds ($276 million) in the quarter through June.
In China, JLR offered higher incentives ahead of a reduction in import duties on vehicles to 10 percent from 25 percent on July 1. Planned dealer stock reduction in other markets also weighed on its business, the company said.
That resulted in a 6.7 percent drop in quarterly revenue, the company said.
Demand in Europe, one of JLR's key markets, waned amid uncertainty over diesel vehicles. The carmaker was impacted “negatively by uncertainty over diesels in Europe along with Brexit and additional diesel taxes in UK,” CEO Ralf Speth said.
The company posted higher sales of its new Jaguar E-Pace compact SUV and the Range Rover Velar, helping offset drop in deliveries of models such as the Land Rover Discovery Sport.
JLR is counting on demand for its new models and an increase in sales in China to help it rebound. "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,” Speth said.
The order book for the I-Pace electric crossover is ballooning, Tata Motors Group CFO P.B. Balaji said on a conference call.
JLR is looking to cut costs by standardizing manufacturing platforms to build a wider range of vehicles and by opening a new plant in Slovakia later this year, a JLR spokeswoman said.
JLR said in April it would cut around 1,000 temporary jobs and production at two of its English factories due to a fall in sales caused by uncertainty around Brexit and confusion over diesel policy.
Tata Motors posted a loss of 19 billion rupees ($277 million).
Bloomberg and Reuters contributed to this report