Jaguar Land Rover weighs heavy on Tata Motors’ Q1 performance

Tata Motors continues to rile under pressure on the back of challenging times for its luxury vehicle arm Jaguar Land Rover, as well as the continuing slowdown in domestic auto retails.

For Q1 FY2020 (April-June 2019), the company has reported a consolidated revenue of Rs 60,830 crore (-7.43% YoY) as against Rs 67,306 crore a year ago. This translates into a net loss of Rs 3,680 crore for the period, which is almost double on a YoY basis. The loss is mainly on account of the loss 402 million pounds (Rs 3,451 crore) reported by Jaguar Land Rover.

The company said the financial performance reflects the historical seasonality and continued challenging market conditions globally, and the results are consistent with its outlook for the quarter. The OEM says JLR's performance reflects the impact of seasonality in the backdrop of weak markets. ‘Project Charge’ is on track to achieve 2.5 billion pounds (Rs 21,465 crore) of profit and cash improvements by the end-2019. With the Chinese market stabilising and a range of new products in the pipeline, JLR is expected to return to positive growth.

Prof. Dr Ralf Speth, chief executive, Jaguar Land Rover, said: "Jaguar Land Rover is in a period of major transformation. We are simplifying our business, delivering on our product strategy and adapting to the tough market environment. We will build on our strong foundations and increased operating efficiency to return to profit this fiscal year. In this period, we expect to see the impact of growing demand for new models such as the Range Rover Evoque, Discovery Sport and Jaguar XE, whilst implementing our 'Charge' transformation programme. Despite challenging conditions in the first quarter, Jaguar Land Rover is creating a more robust and resilient business, in which we will continue to deliver a strong pipeline of products that our customers will love. Breakthrough products such as the exciting all new Land Rover Defender will pave the way for sustainable profitable growth."

Tata Motors optimistic on Turnaround 2.0
Tata Motors, which has embarked on its journey to regain lost share in the domestic CV and PV segment, is bullish on witnessing growth momentum. For Q1 FY2020, on a standalone basis, the company reported a revenue of Rs 13,352 crore (-20% YoY) and reported a loss of Rs 97 crore, compared to PAT of Rs 1,464 crore for the same period last year.

During the quarter, wholesales (including exports) saw a decline of 22.7 percent to 136,705 units. In the domestic market, the M&HCV segment sales dropped 30.4 percent, ILCVs grew 2.5 percent, SCV and pick-ups de-grew 11.2 percent and CV passengers de-grew by 9.4 percent. In the passenger vehicle segment, Tata Motors’ sales were down 30.1 percent.

Commenting on the results, Guenter Butschek, CEO and MD, Tata Motors, said: "The continued slowdown across the auto industry due to weak consumer sentiments, liquidity stress and the impact of axle load effect particularly in medium/heavy duty, impacted overall demand. Over the past few years, we had struck a good balance between managing market dynamics and financial health. However, this time, despite our continuous Turnaround effort, we could not prevent some impact on our Q1 performance. Looking ahead, both our businesses – CV and PV – will leverage Tata Motors' revived agility and strive to boost consumers' confidence by various market interventions — all around from best-in-class product offerings, retail activations and further improved service experience. With the Budget announcement and upcoming festive season, we expect some tailwinds for the remaining of FY20. Furthermore, our Turnaround actions are in full swing and will provide us a great level of confidence to master this unprecedented market challenge and we will get out of it even stronger."

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