Economy

Jaguar Land Rover suffers massive fourth-quarter loss

Jaguar Land Rover suffers massive fourth-quarter loss

Tata Motors Ltd on Thursday forecast its United Kingdom unit Jaguar Land Rover (JLR) Automotive Plc.to incur an operating loss this fiscal year mainly because of continued muted demand in JLR's single-largest market, China.

The extent of the financial problems besetting Britain's largest automotive manufacturer and employer has been laid bare less than a month after it announced 4,500 job cuts across its United Kingdom facilities, mainly in the West Midlands.

JLR parent Tata Motors expects costs from the voluntary redundancy program to be recognized in the quarter ending in March. Its sales in China - the world's biggest vehicle market - fell 40% in January compared to the same period past year.

Diesel vehicles account for just under 90% of Jaguar Land Rover's sales in Europe at a time when consumers are increasingly choosing more environmentally-friendly options.

Tata Motors' profit for its Indian operations grew three-fold from the year earlier in the December quarter to ₹618 crore. The rating company has placed Tata Motors on negative credit watch. Domestic revenue at Rs16,208 crore for the quarter was up 1.5 per cent, it said, adding that its market shares for CVs was up 60 bps compared to FY 18 while sales of personal vehicles were up 50bps. "Continue to invest in exciting products and leading edge technologies".

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Tata acquired JLR for £1.15 billion way back in 2008.

"In JLR, the market conditions continue to be challenging particularly in China. With these interventions, we are building Tata Motors group to deliver strong results in the medium term".

But analysts expect JLR to struggle to generate profit with China's economy projected to slow further this year after growth eased to its weakest pace in nearly three decades in 2018. Our business performance is well on track - thanks to the turnaround momentum in the Company.

On Friday, Tata Motors and Tata Motors DVR tanked over 20 per cent each and hit a low of Rs 129 levels and Rs 71, respectively on the National Stock Exchange (NSE). This accounting adjustment is consistent with the other decisive actions that we must take as part of our "Charge" and "Accelerate" transformation programmes to create an efficient and resilient business, enabling Jaguar Land Rover to counter the multiple economic, geopolitical, technological and regulatory headwinds presently impacting the automotive industry.

Jaguar Land Rover is under pressure on several fronts.


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