April 23, 2019

Jaguar owner plunges most in 26 Years after record loss

10 February 2019, 05:43 | Joann Bryant

Jaguar owner plunges most in 26 Years after record loss

Tata Motors Posts Rs 26,993 Crore Quarterly Loss Its Biggest Ever

Sales in North America were up 13.2 per cent but China was down 39.8 per cent and Europe also slipped by 5.7 per cent amid slowing economic growth and continuing diesel uncertainty.

"The automotive industry is facing significant market, technological, and regulatory headwinds". It added that the investment in new models and technology remains high this year because of the weak sales, that sharply contrasts with the expectations that the British auto maker would break even. "Given the muted demand scenario and the associated impact on the financials, JLR has concluded that the carrying value of capitalised investments should be written down, resulting in a GBP 3.1 billion pre-tax exceptional charge", JLR said in a presentation.

Jaguar chief executive Ralf Speth said: "Jaguar Land Rover reported strong third quarter sales in the United Kingdom and North America, but our overall performance continued to be impacted by challenging market conditions in China". Quarterly revenue stood at GBP 6.22 billion, versus GBP 6.31 billion. The staggering loss comes even as its domestic business seems to have achieved a turnaround, with standalone profits almost tripling from Rs 211.59 crore for the same period of past year to Rs 617.62 crore. Resolution of China dealership issues is still ongoing and resulting volume reset could continue over next few months; Brexit is another overhang with no clarity yet.

"In JLR, market conditions continue to be challenging, particularly in China. China, one of our most profitable markets, is hurting us", Tata Motors' group chief financial officer P.B. Balaji said in a conference call with reporters.

The company had reported a net profit of Rs 1,214.6 crore in the October-December quarter of 2017-18. Total standalone income rose to Rs 16,477.07 crore as against Rs 16,186.15 crore in the same period of previous fiscal.

JLR's Chinese sales, which account for roughly one-in-seven of its global sales, fell 40 per cent year-on-year, which offset growth in the U.S. and British markets.

But analysts expect JLR to struggle to generate profit with China's economy projected to slow further this year after growth eased to its weakest pace in nearly three decades in 2018. JLR reported a loss for the third consecutive quarter.

Land Rover sold 30,934 vehicles in the month, down 11.6 per cent year-on-year as strong sales of the refreshed Range Rover (up 60 per cent to 4,955) and Range Rover Sport (up 31.3 per cent to 7,122) were more than offset by the run out of the Evoque and lower sales of other models largely reflecting weaker demand in China. "Our aspirations for the future will only grow to surpass customers' expectations", Guenter Butschek, CEO and MD, Tata Motors, said.

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