Tata Motors posts record $4 billion loss on Jaguar woes, shares crash

JLR snip 1

Sales for the quarter were £6.2bn, down from £6.3bn a year earlier.

Last month Jaguar Land Rover joined Honda and Toyota in announcing a post-Brexit temporary plant shutdown, which will affect all three of its United Kingdom vehicle factories, as well as its engine plant in Wolverhampton.

Fitch Ratings said on Wednesday it has placed the credit rating of Tata Motors on negative watch, stating increasing risks for its British luxury vehicle unit - Jaguar Land Rover (JLR) - over a potentially chaotic Brexit. While JLR's growth in most of its key markets, including the UK, Europe and the United States, has been satisfactory, China "has been a problem", he said.

The non-cash loss of Rs 26,961 crore, the largest in the company's history in absolute terms, was on account of uncertainties around Brexit, slowing sales in China, and technological disruptions facing JLR.

The loss includes a one-off £3.1 billion "exceptional charge", resulting from the firm deciding to adjust the "carrying value" of its capitalised investments. This accounting adjustment is consistent with the other decisive actions that we must take as part of our "Charge" and "Accelerate" transformation programmes to create an efficient and resilient business, enabling Jaguar Land Rover to counter the multiple economic, geopolitical, technological and regulatory headwinds presently impacting the automotive industry.

Total expenditure: Consolidated expenditure jumped to Rs 78,797.08 crore in Q3 FY19 over Rs 72,303.95 crore in the same period previous year. USA sales rose 20 per cent and 18 per cent in the UK.

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N Chandrasekaran, Chairman, Tata Motors said, "For JLR, market conditions continue to be challenging, particularly in China".

The company announced last month that it would reduce its global workforce by 4,500 people.

Speth said: "This is a hard time for the industry but we remain focused on ensuring sustainable and profitable growth and making targeted investments that will secure our business in the future".

"This is expected to result in a one-time exceptional redundancy cost of around 200 million pounds", it added.

FILE PHOTO: The 2017 Land Rover Discovery is pictured at the 2016 Los Angeles Auto Show in Los Angeles, California, U.S November 16, 2016. "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".

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