Jaguar Land Rover (JLR) suffered a £395 million loss in the three months to the end of June as sales fell by 12% to 128,615.

Despite record sales in the UK, which saw volumes rise by 2.6% year-on-year for the period to June 30, JLR said that factory downtime booked in anticipation of Britain leaving the EU in April and delays in WLTP certification have contributed to a decline in profit and revenues in the last quarter.

Revenues slipped 2.8% to £5.1 billion as the British carmaker slipped back into the red following its reporting of a profit of £120m between January and March.

Tata Motors-owned JLR insists that it will return to profit this year on the back of cost-cutting and new model launches, however.

It reported that its cost-saving Project Charge programme had provided £100 million of cost savings and a £300 million reduction to previously planned investment in the quarter, adding that it was now on track to achieve £2.5 billion of cash and profit improvements, with a total of £1.7 billion now achieved to date.

JLR chief executive, Prof Ralf Speth, said: “Despite challenging conditions in the first quarter, Jaguar Land Rover is creating a more robust and resilient business, in which we will continue to deliver a strong pipeline of products that our customers will love.

“Breakthrough products such as the exciting all new Land Rover Defender will pave the way for sustainable profitable growth.”

JLR has been hampered by the impact of global trade wars, which have hampered its sales in China, and is yet to realise the benefits of the launch of new Land Rover Defender Range.

The new Range Rover Evoque, launched earlier this year, is also expected to ramp-up its contribution to the manufacturer’s sales fortunes across the globe, with additional growth anticipated in the US.

Earlier this month the company also announced its plan to spend close to £1bn installing electric tooling in its Castle Bromwich factory to build three new electrified models, the first of which will be the next generation all-electric Jaguar XJ EV.

JLR said that its free cash flow was negative £719 million after £795 million of investment spending in the quarter, but added that this represented a £954 million improvement year-on-year.

The UK Government has announced that it would underwrite JLR’s EV programme spending to the tune of £500 million as part of a £625 million loan facility expected to be completed in the coming months and amortize over five years.