Tata Motors falls on dwindling quarterly sales of Jaguar Land Rover

Lloyd Doyle
May 22, 2019

Tata Motors Ltd's fourth-quarter profit fell less than expected on Monday, with the Indian automaker saying tighter control of expenses and a turnaround at its Jaguar Land Rover (JLR) unit helped tiresome the impact of economic slowdown at home. JLR's total sales fell almost 6% to 7.1 billion pounds in the fourth quarter of fiscal 2019.

A CNBC-TV18 poll expected a net profit of Rs 825 crore on revenue of Rs 86,491 crore. Performance was also impacted because of muted sales of its vehicles in India. The reported profit almost halved from a year earlier.

During the latest quarter, JLR announced a voluntary redundancy programme and accordingly had an exceptional charge of Rs 1,367.22 crore.

Deepening losses come after it was reported earlier this month that PSA - the owner of Peugeot, Citroen and Vauxhall - was eyeing up a deal to acquire the luxury auto manufacturer.

There has been earlier speculation of Tata Motors selling JLR to the PSA Group, but as Autocar reports, Tata's financial chief again refuted these rumors. The focus is to transform the business by cutting costs and improving cash flows, JLR CEO Ralf Speth said.

"We will go forward as a transformed company that is leaner and fitter, building on the sustained investment of recent years in new products and the autonomous, connected, electric and shared technologies that will drive future demand".

In October a year ago, N Chandrasekaran, chairman of JLR's parent company Tata Motors, announced a turnaround programme at JLR "to drive £2.5bn of profit, cost, and cash flow improvements over the next 18 months".

JLR's overall revenue for the year was £24.2 billion and the company talked about "encouraging demand" for new models including Jaguar E-Pace, Jaguar I-Pace, Range Rover Velar and Range Rover Evoque during a press conference held today (May 20). The British unit plans to reduce costs by 1.2 billion pounds this fiscal.

On Monday, the company reported 49 per cent decline in March quarter 2019 results at Rs 1,108.66 crore. The fall in revenue was due to liquidity stress, axle load norm charges and a slowing Indian economy.

Other reports by Iphone Fresh

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