UK’s biggest carmaker Jaguar Land Rover’s earnings fell as much as 37 percent in the April-June quarter due to foreign exchange losses (depreciation of the pound) following Britain’s decision to exit the European Union. Notably, the manufacturer recorded higher sales in the same period.

Additionally, lower local market incentive, higher depreciation and amortisation expenses as compared to the corresponding quarter last year have also fuelled the decline in consolidated profit for the quarter.

Profit before tax was £399 million (around Rs 3,504 crore) for the quarter compared to £638 million (around Rs 5,602 crore) in the corresponding quarter last year. Interestingly enough, the carmaker continued its strong sales performance during the quarter with global retail sales increasing by 16 percent to 1,32,700 vehicles for the three-month period to June 30, 2016.

JLR’s sales were up across all regions. The introduction of new models, including the Jaguar XE and F-Pace, saw Jaguar retail sales increase by 76 percent in the first quarter to 31,800 vehicles. Land Rover also saw retail sales in the quarter grow by four percent, exceeding 1,00,000 vehicles for the first time, led by continued strong demand for the Land Rover Discovery Sport. 

This decline in earnings resulted in the parent company Tata Motors' April-June net profit declining by more than half.  The carmaker reported a 57 percent drop in its net profit during the quarter to Rs 2,236 crore as against Rs 6,340 crore for the corresponding quarter last year.

Jaguar Land Rover accounts for a huge chunk of Tata Motors revenue and profit. For instance, in fiscal 2015, it contributed 83.2 percent of the company's total automotive revenue.

It was anticipated that Tata Motors would be hit by Britain Exiting the EU or ’Brexit’ as it is widely known, with shares of the carmaker plunging over 10 percent on the news.