Jaguar Land Rover owner records $4 billion loss, driving share price down
Tata Motors shocked investors after revealing the largest quarterly loss in Indian corporate history, with the owner of Jaguar Land Rover losing around $4 billion following a major dip in Chinese sales.
Jaguar Land Rover (JLR) owner Tata Motors has posted a $4 billon loss due to a slump in Chinese demand that has hurt sales and sent its share price tumbling as much as 30%.
Following the news, Tata Motors issued a warning that its JLR unit, will also suffer an operating loss in the year to March, a downgrade on its earlier forecast for the business which predicted that it would manage to breakeven.
‘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,’ CFO PB Balaji told reporters on a conference call on Thursday.
Tata Motors hurt by weaker China demand
A slump is Chinese demand is hitting JLR’s sales hard, with consumer interest in the luxury carmaker’s vehicles halving n the December quarter adding to the signs that China’s economy is beginning to slowdown.
Not only is JLR having to contend with weaker demand from China, but the carmaker is having to contend with ongoing Brexit uncertainty and low demand for its diesel cars which it relies on for the bulk of its sales in the European market.
JLR acts to stop further losses
In an effort to mitigate to impact of weaker demand in China, JLR is focusing on generating profits for its car dealers, with the company looking to incentivise retail sales over wholesale, Balaji told reporters.
‘We are encouraged by continued demand for the refreshed Range Rover and Range Rover Sport,’ JLR Chief Commercial Officer Felix Brautigam said in a statement.
‘With deliveries of the new Evoque due to start later this quarter, we look forward to building momentum,’ he added.
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