Jaguar Land Rover expects financial fallout from Tianjin blast
Company stored nearly 6,000 vehicles at the port.
Jaguar Land Rover (JLR) announced Wednesday that it expects to take a hit in its third-quarter (Q2 fiscal) earnings due to the August explosion at the Chinese port of Tianjin that killed more than 150 people and laid waste to acres of storage and other facilities.
"Given the exceptional nature of this event, Jaguar Land Rover is still assessing the damages and it may be some time before the company knows what insurance and other recoveries will be. In these circumstances, there is likely to be a one-time exceptional charge in Q2 FY16 before any potential recoveries in subsequent quarters," the company said in a release detailing global sales figures for September.
The blast, which happened around midnight on the 12th of August, took place at a chemical warehouse facility in the port city, located approximately 75 miles from Beijing. The first explosion was recorded by seismic instruments at a magnitude of 2.3, while the larger second explosion measured 2.9, equivalent to 21 tons of TNT, according to CNN.
JLR was not the only automotive manufacturer to lose product in the explosion. Renault and Volkswagen reported large inventory losses in the fire. Volkswagen alone reported damage to several thousand vehicles, according to a Chinese news report cited by Jalopnik. A source claims the total includes several hundred Beetles and more than 1,000 Touaregs, among other models.
Fortunately for JLR, its Land Rover division is experiencing strong sales in its other large markets, where cheap gas and low interest rates have spurred demand for trucks and SUVs.
"Sales in the UK, Europe and North America have shown impressive growth year-to-date and despite a challenging macro-economic environment, particularly in China, customer demand for both our Jaguar and Land Rover vehicles remains encouraging," the company said.