British car manufacturer Jaguar Land Rover’s ongoing business woes over its China presence and the uncertainties surrounding Brexit have contributed to punch a massive US$ 3.8 billion hole in parent Tata Motors Q3 earnings.
The bulk of the losses are being attributed to one-time write downs at the British company amounting to 3.1 billion Pound Sterling. Tata Motors had posted a profit of US$ 170 million in Q3 last year.
Overall outlook for Tata Motors is healthy with consolidated revenue growing 5% YoY in the period to US$ 10.8 billion and a major rejig of its Indian passenger car portfolio resulting in popular new models like the Tata Nexon and JLR-engineered Tata Harrier.
However, its filing indicated that there is a good likelihood of the full year results (EBIT) being in the red even before one time costs are taken into account.
N Chandrasekaran, Chairman commented, “Tata Motors domestic business continues the strong momentum and has delivered market share gains as well as profitable growth. The Turnaround 2.0 strategy is delivering well with a continuing portfolio of product launches, which are the requisite building blocks for sustainable growth.
In JLR, the market conditions continue to be challenging particularly in China. The company has taken decisive steps to step up competitiveness, reduce the costs and improve the cash flows while continuing to invest in exciting products and leading edge technologies. With these interventions, we are building Tata Motors group to deliver strong results in the medium term”.
Jaguar Land Rover is seen to be delivering on the ‘Charge and Accelerate’ program initiated in order to reduce costs, including removing up to 4,000 global staff, while investing close to 2.5 billion Pound Sterling in new technologies, like electric drivetrains and cars.
Guenter Butschek, CEO and MD, Tata Motors, said “Fiscal year 2019 so far has been a challenging period for the industry. Despite the muted growth, Tata Motors has delivered strong results, registered an impressive profitable growth this year on the back of exciting products, renewed brand positioning and aggressive cost reduction. Our business performance is well on track – thanks to the turnaround momentum in the Company. We are committed to our core objectives of winning decisively in CVs, sustainably in PVs and proactively in EVs. Our aspirations for the future will only grow to surpass customers’ expectations.”