Sales of Jaguar Land Rover cars have fallen sharply, taking the firm into a loss for the three months to the end of September.
The firm blamed lower sales in China for the decline, as well as uncertainty in Europe over diesel and Brexit.
Jaguar made a pre-tax loss of £90m for the quarter, compared to a profit for the same period a year ago.
JLR said as a result, it was launching a “far-reaching” cost-cutting programme to improve profitability.
Jaguar Land Rover said it would be reducing spending by £500m this financial year and next, with the aim of improving profitability by £2.5bn.
The new strategy would “lay the foundations for long-term sustainable, profitable growth”, said chief executive Ralf Speth.
The firm’s Solihull plant, where it makes Range Rover and Jaguar models, is currently closed for a two-week shutdown in response to “fluctuating demand”. That follows a move to a three-day week at JLR’s Castle Bromwich plant.
Analysis: Jonty Bloom, BBC business correspondent
JLR is the jewel in the crown of the UK car industry, making top-end luxury models with an unmistakable British appeal. That has seen it win huge export markets in Europe, the US and increasingly in China.
But it has been hit by a series of problems; many of its models have diesel engines and have therefore been affected by recent environmental worries and it is seen as having been too slow to adapt to demands for new hybrid and electric versions.
The North American market is slowing down, but it is in China that it has had its biggest problems. JLR says sales there have been hit by consumer uncertainty following import duty changes and escalating trade tensions with the US, but other luxury car brands are increasing sales there, so it is not clear why JLR is suffering so badly.
The company has already responded by cutting back production at two plants and laying off agency staff, but now it has announced it is aiming to save £2.5bn in costs and improved cash flow over the next 18 months. Which is likely to mean a tough time for JLR and its suppliers.
Jaguar said the fall in sales reflected “challenging” market conditions in China, where demand was affected by consumer uncertainty over changes to import duties and escalating trade tensions between the US and China.
The firm said sales in Europe had been depressed by weaker demand for diesel vehicles, the introduction of new emissions-testing rules and uncertainty related to Brexit. Revenues were £5.6bn on sales of 129,887 vehicles in the three months to October.