Jaguar Land Rover (JLR), the British arm of Mumbai- based Tata Motors on Friday reported an improved performance back on better-operating metrics in China.
The company reported a pre-tax profit of 156 million pounds (Rs 1,415 crore) with its wholesales increasing by 2.9 per cent at 134,489 units. Commenting on the development, Dr Ralf Speth, Jaguar Land Rover's CEO said: “Jaguar Land Rover has returned to profitability and revenue growth. This is a testament to the fundamental strength of our business, our award-winning products, new technologies and operating efficiencies.”
“We were one of the first companies in our sector to address the challenges facing our industry. As such, it is encouraging to see the impact of our 'Project Charge' transformation programme and improvement initiatives in the China market started to come through in our results,” Dr Speth added.
Revenue increased 8 percent year-on-year to £6.1 billion (Rs 55,339 crore), driven by higher wholesales (up 2.9%) and favourable product mix. While total retail sales were down slightly (-0.7%), performance in China improved sharply, up 24.3%. Global retail sales of the new Range Rover Evoque were up 54.6%, the Range Rover Sport up 17.5% and Jaguar I-Pace retails were up to 2,593 units.
As per the statement issued by JLR, the company generated pre-tax profits of £156 million in the quarter, a YoY growth of £246 million (Rs 2,231 crore). The improvement reflects favourable wholesale volume and mix, operating costs, depreciation and amortization, and foreign exchange.
The company’s Project Charge transformation programme contributed £162 million (Rs 1,469 crore) of cost improvement and £285 million (Rs 2,585 crore) reduction in investment spending in the quarter. “With £2.2 billion (Rs 19,954 crore) efficiencies achieved to date, Jaguar Land Rover remains on track to achieve the full targeted £2.5 billion (Rs 22,681 crore) by 31 March 2020 and further improvements beyond then” the company added in a statement.
Tata Motors Q2 FY2020
Meanwhile, on a standalone basis, Tata Motors said its net loss for the quarter was at Rs 1,281.97 crore as against a profit of Rs 109.14 crore in the year-ago period.
Guenter Butschek, CEO and MD, Tata Motors, said,“ The industry has been grappling with a long and sharp slowdown. Growth continues to be impacted by subdued demand, higher capacity from the new axle load norms, liquidity stress, low freight availability, weak consumer sentiment and general economic slowdown. The sharp market decline over the last few months has impacted our Q2 performance as well which is disappointing. With the onset of the festive season, we are seeing initial green shoots this month with better retails in passenger vehicles. We hope that the slew of measures announced by the government so far, as well as their commitments to front end significant infrastructure investments, introduce a scrappage policy and ensure adequate liquidity to MSMEs will improve the situation in the coming months.”
However, Tata Motors' executives said that the company has done a major correction of vehicle inventory worth Rs 3,400 crore done since June-end till now.