Tata Q3 loss biggest in India’s corporate
MUMBAI: The Indian owner of Jaguar Land Rover Automotive Plc reported the biggest quarterly loss in the country’s corporate history because of a charge stemming from a slump in China’s car market that’s hit global carmakers.
Tata Motors Ltd’s net loss was 270 billion rupees (RM 15.45 billion) in the three months through December, exceeding the deficit reported by Indian Oil Corp in 2012.
Plummeting sales in China are compounding Jaguar Land Rover’s challenges that include the industry’s shift away from vehicles powered by petrol and diesel — a stronghold for the company.
Its heavy production presence in the United Kingdom exposes it to a disorderly Brexit, the likelihood of which has risen over the past few weeks, said Fitch Ratings this week. The rating company has placed Tata Motors on negative credit watch.
The “overall performance continued to be impacted by challenging market conditions in China,” said Ralf Speth, head of Jaguar Land Rover, in a statement on Thursday.
Tata Motors’ American depository receipts fell 9.5 per cent to US$11.40 (RM46.39) in New York. Its shares have slumped 51 per cent in the past 12 months, here, on concerns about Jaguar Land Rover’s waning sales, profitability, high capital-expenditure need and the impact of Brexit.
Jaguar Land Rover said it’s overhauling its China operation, cutting back on deliveries to reduce stock. It’s also streamlined its commercial policies to help compensate for retailers’ losses, and launching extensive on-site training programmes to improve the customer experience as well as operations.
Tata Motors wrote down its investment in Jaguar Land Rover by US$3.9 billion due to market challenges, especially in China, technology disruptions and rising debt costs. The parent’s net loss compared with a profit of 12 billion rupees a year earlier, and also missed the average analyst estimate that called for a profit.
As part of Jaguar Land Rover’s plans to achieve £2.5 billion (RM13.11 billion) of investment, working capital and profit improvements by March next year, the company in January said it would slash its global workforce by 4,500.