Tata Motors reports Rs26,961-cr consolidated Q3 loss


Not only is JLR having to contend with weaker demand from China, but the carmaker is having to contend with ongoing Brexit uncertainty and low demand for its diesel cars which it relies on for the bulk of its sales in the European market.

Tata Motors' overseas woes have finally come home to roost, and how!

Jaguar Land Rover said that drop in profit was down to a slump in sales in the struggling Chinese market, which offset a slight rise in sales in Europe and the US.

"The automotive industry is facing significant market, technological, and regulatory headwinds".

Tata Motors shares were down 17 per cent at 151 rupees as of 11:10am in Mumbai.

Last month Jaguar Land Rover joined Honda and Toyota in announcing a post-Brexit temporary plant shutdown, which will affect all three of its United Kingdom vehicle factories, as well as its engine plant in Wolverhampton.

Carmakers around the planet are getting hurt by the slump in China, whose auto market shrank for the first time in more than two decades a year ago.

JLR's retail sales in China, which account for about one in every seven of its cars sold worldwide, fell by 40% year on year during the quarter, overshadowing growth in the USA and British markets.

More news: Trump to undergo second physical exam Friday
More news: Virginia's 3rd in line for governor swears he never wore blackface
More news: Nantes to Retire Emiliano Sala's No. 9 Jersey as Tribute

Jaguar Land Rover said it continued to invest in exciting products, electrification, and technology.

"In JLR, the market conditions continue to be challenging particularly in China".

Kotak Institutional Equities has also maintained a "buy" rating on Tata Motors.

It's also streamlined its commercial policies to help compensate for retailers' losses, and launching extensive on-site training programs to improve the customer experience as well as operations.

Tata Motors' loss came at Rs 26,993 crore ($3.78 billion) for the three months ended December 31, compared with a profit of Rs 1,199 crore in the year-ago period. "They are reinforcing that they are serious about achieving a turnaround, saving costs and taking measures that might be tough".

Tata Motors wrote down its investment in Jaguar Land Rover by US$3.9 billion (S$5.3 billion) due to market challenges, especially in China, technology disruptions and rising debt costs.

Given the muted demand for its vehicles JLR has concluded that the carrying value of capitalised investments should be adjusted down, resulting in a non-cash £3.1bn pre-tax exceptional charge and an overall pre-tax loss of £3.4 billion for the quarter.

The company announced last month that it would reduce its global workforce by 4,500 people.