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Tiajin Explosion Will Impact Jaguar's 3rd Quarter Earnings

2444 Views 4 Replies 3 Participants Last post by  Winger

Back in August there were two huge explosions in Tianjin, China. It actually was picked up by seismic instruments (2.3 magnitude for the first, and 2.9 for the second). Unfortunately for Jaguar the explosions happened to acres of storage and facilities that were partly used by JLR (as well as Renault and Volkswagen). And that is going to have an impact on JLR's earnings.

"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.
(Watch the videos of the explosions if you haven't before. It's crazy!)
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Will the factory owners reimburse JLR for the damages? Seems unfair if they don't have to pay for damages that their explosion caused due to mismanagement.
Most of the loss of sale is from China and it's partly because of the explosion (loss a lot of units) and because of the economic downturn. Jaguar still did pretty well in North America and the UK.
Think they had around 5,800 vehicles stored near the explosion site. Insurance will take a long time to calculate their reimbursement.
I think that insurance will cover it, it is just yet to be determined exactly how much the cheque will be for. But the lost of units definitely will affect deliveries. Probably more so for China. Maybe the downturn there doesn't look so bad now since Jaguar doesn't have the extra units to give to people anyway.
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