Jaguar Land Rover owner Tata makes record-breaking loss of £3bn
Shares in the group crashed by as much as 30 per cent, the biggest fall in 26 years
The group reported a loss of 270bn rupees (£2.9bn) for the third quarter of this financial year, the biggest loss recorded in Indian corporate history.
Shares in Tata plunged by as much as 30 per cent – the biggest drop in 26 years after the company revealed the figures.
The problems largely stem from the Jaguar unit, which makes up the bulk of Tata’s revenue.
The group said the automotive industry is “facing significant market, technological, and regulatory headwinds”, and added that investment in new models and technology remains high.
Given the “muted-demand scenario”, the company warned that JLR is set to swing to a loss this year due to weak sales, contrasting sharply with expectations that the British carmaker would break even.
Jaguar Land Rover announced 4,500 job cuts earlier this year, the majority of which will affect UK workers.
The firm has also warned that it needs more certainty around Brexit in order to continue investing in its UK operations, and said a “bad Brexit” would cost the company more than £1.2bn in profit each year.
Tata chairman Natarajan Chandrasekaran said: “In JLR, the market conditions continue to be challenging particularly in China.
“The company has taken decisive steps to step up competitiveness, reduce the costs and improve the cash flows while continuing to invest in exciting products and leading-edge technologies. With these interventions, we are building Tata Motors group to deliver strong results in the medium term.”
Tata’s chief financial officer PB Balaji said: “We are now taking clear and decisive actions in JLR to step up its competitiveness, reduce costs and improve cash flows and make the business fit for the future.”
Tata bought JLR for £1.15bn in 2008, replacing Ford as the owner of the British brands Jaguar and Land Rover.
Additional reporting be newswires