JLR has lost its edge, says Tata Motors CFO
Motors Ltd believes its money-spinner Jaguar Land Rover has lost operating leverage amidst lower sales in China and Brexit, said a top executive at the Mumbai-based auto maker.
The woes at the UK-based unit have raised concerns among investors and shareholders about how Tata Motors shares will fare going forward and the auto maker’s ability to continue paying dividends, said P B Balaji, Tata Motors’ chief financial officer.
Declining sales of diesel vehicles, Brexit concerns, tariffs
and the need for high investments in the face of the technology disruption happening in the auto industry are among the big challenges that British luxury marques
are facing, Balaji told Tata Review, an internal company magazine that comes out every quarter. Mint has a copy of the magazine.
“These are compounded by
internal cost challenges. The teams are facing a new normal—of lower growths with higher capex needs—and are working actively to reduce costs and improve cash flows,” Balaji said.
JLR’s retail sales fell 12% from the year earlier in September, accelerating the fall over the last three months. The China market continues to be unsettled following “tariff changes and trade tensions” that led to a 46% drop in retail sales in the key market. Sales in the UK and Germany fell 20% and 31% respectively due to reduced diesel demand, while US sales, which were growing so far, also declined 5.5% last month.