Jaguar Land Rover has posted a £3.4 billion (RM17.9 billion) loss for the fourth quarter of 2018, driven partly by sluggish sales in China and a reduction in the value of its plants and other investments. The quarterly loss is the biggest in the firm’s history.

The BBC reports that JLR sales for the quarter were £6.2 billion (RM32.61 billion), down from £6.3 billion (RM33.14 billion) a year earlier. Total sales tallied at 144,602 vehicles, down from 154,447 during the same period in 2017.

Of the £3.4 billion, £3.1 billion (RM16.30 billion) accounted for the write-down on the value of its investments. Half of the figure, JLR admits, are investments in land and facilities that are worth substantially lesser than what they originally thought, whereas the other half is due to ‘goodwill impairments,’ essentially acknowledging that future earnings potential is likely diminished, CarAdvice reports.

Excluding the write-down, which affects its balance sheet but has no effect on cash, the company posted a loss of £273 million (RM1.44 billion). Jaguar chief executive Ralf Speth said: “Jaguar Land Rover reported strong third-quarter sales in the UK and North America, but our overall performance continued to be impacted by challenging market conditions in China.”

Part of the slump in sales is also due to lower demand for diesel-powered cars

Last month, the UK’s largest auto company announced plans to slash around 10% of its workforce (more than 4,500 employees globally), and JLR owner Tata Motors says the £2.5 billion (RM13.15 billion) savings from the programme will boost cash flow through 2020. The employee layoff programme comes on top of the 1,500 people who left the firm in 2018.

Last October, Speth told CarAdvice that the production slowdown was caused by something of a perfect storm. Along with the global decline in demand for diesel, uncertainty surrounding the US and Chinese trade war has played a role in the downturn as well.

“We have five global regions around the world and we are more or less nicely balanced in terms of volume across these markets, but depending on the level of downturn in China, the impact is most likely to affect the premium car market as a whole, no ifs or buts,” Speth said.