Tata Motors plummets 30% after Jaguar Land Rover loss
Tata Motors fell almost 30% in the stock market after its Jaguar Land Rover subsidiary dragged the Indian company to its biggest quarterly loss to date.
The Mumbai-based manufacturer has been badly hit by falling demand for luxury cars in China, as well as uncertainty over Brexit and rising debt.
Tata Motors announced a net loss of 270bn rupees ($3.8 billion) for the quarter ending December yesterday due to a $3.9-bn write-down on JLR. Compared to a profit of 12bn rupees the same time a year ago it marks the greatest loss for the company in Indian corporate history reported Bloomberg.
Tata Motors expects the EBIT margin of Jaguar Land Rover (JLR) for the 2018-19 fiscal year ending 31 March, to be "marginally negative" compared to a previous forecast to stay "balanced", said the CFO , PB Balaji.
JLR has been severely affected by the drop in demand for luxury cars in China as well as by the Brexit uncertainty and the increase in debt.
In spite of this, Tata Motors assure that the business of the company "continues with a strong impulse and has generated earnings of participation in the market, as well as a profitable growth".
Meanwhile, JLR CEO Ralf Speth has said that "this is a difficult time for the industry, but we remain focused on ensuring sustainable and profitable growth, and making specific investments that will ensure our business in the future."
JLR announced last month that it was scrapping 4,500 jobs worldwide and, earlier this week, the credit rating agency Fitch placed it on negative watch. "The trade barriers and logistical problems of a messy Brexit could have an impact on JLR's competitive positioning and lead to significantly lower sales and profitability," Fitch said.