JLR runs into Chinese wall, drives Tata Motors into losses in Q2

MUMBAI : Tata Motors Ltd, India’s largest automaker by sales, reported a loss for the second consecutive quarter weighed down by a continued weak performance at its unit, Jaguar Land Rover Automotive Plc.

JLR, which contributes to the bulk of the earnings at Tata Motors, was hammered by fluctuating political events globally, especially the ongoing trade war between the US and China. Sales in India stayed on the growth path thanks to demand for passenger as well as commercial vehicles. Tata Motors reported a net loss of ₹1,009.49 crore in the three months through September, compared with a year earlier net profit of ₹2,502 crore. It is the company’s second quarterly loss in three years, since a ₹1,902 crore loss in the June quarter.

A poll of six analysts estimated Tata Motors to post a loss of ₹874.4 crore last quarter. Slowing sales in China— JLR’S single-biggest market and one of its most profitable—hit earnings in the just-ended quarter as retails there fell 44% to 21,096 units. As a result, JLR turned in a quarterly loss of £101 million on an 11% drop in sales to £5.6 billion. “I haven’t seen so many political developments affecting the business. I can’t do anything about it,” said Ralf Speth, chief executive at JLR, referring to the various geopolitical headwinds faced by JLR at the moment. “It’s the slowest growth (in sales)—in perhaps a decade,” Speth said, adding he sees “a very, very weak market situation in the premium segment” in China owing to a slowdown in economic growth and uncertainty due to the trade war with US.