Just a week ago, Jaguar Land Rover infamously made history by handing its parent company, Tata, the worst-ever quarterly loss in Indian corporate history. The Reuters reports says that worries surrounding Brexit and weakening retail sales in China are to blame. A report from Automotive News explores deeper problems at hand: declining quality.

The report states that all other premium automotive brands—Audi, Mercedes-Benz, and BMW as well as Cadillac, Lexus, and Volvo have all posted impressive sales growth in China. Instead, what has contributed to Jaguar Land Rover’s 22 percent slide has to do with product quality.

Quoting from Automotive News:

The problem has lingered since Tata Motors acquired the famed brands in 2008. 

In 2014, JLR started production at a joint venture with Chery Automobile Co. in the east China city of Changshu. From 2015 to 2017, five locally assembled products — the Land Rover Evoque and Discovery and the Jaguar XFL, XEL and E-Pace — were launched. 

Local production allowed JLR to modify vehicle interiors and exteriors to local tastes. It also enabled buyers to avoid the 25 percent tariff that Chinese customs levied on imported vehicles back then. 

As a result, JLR’s China sales surged to 146,399 in 2017 from 92,474 in 2015. 

But because the company never effectively addressed product quality, the number of defects reported by owners increased in tandem.

The report goes on to say that in 2017 alone, Jaguar Land Rover carried out 13 recalls in China for defects concerning engines, instrument panels, airbags, and batteries. The recall, Automotive News says, covered 106,000 vehicles or 70 percent of total China sales during the year.

The report also says that “Jaguar and Land Rover owners have regularly protested in front of JLR’s China headquarters in Shanghai to bring attention to widespread quality problems they allege with their vehicles.”

Quoting Automotive News:

The problems have dented the images of Jaguar and Land Rover in China, rendering their products even less attractive to local consumers.

In order to arrest its sale slide in China, dealers there have been offering steep discounts. The deal had Jaguar discount models as much as 30 percent. It won’t be enough to cause the joint-venture plant to stop production though which will idle next month.

Source: Automotive News