Jaguar impairment charge hurts Tata’s quarterly results
Bengaluru — Indian car maker Tata Motors posted its biggest quarterly loss on Thursday, hurt by an impairment charge for its British luxury car business Jaguar Land Rover (JLR).
Troubles at the JLR unit, which has been hit hard by US-China trade tensions, low demand for diesel cars in Europe, and Brexit worries, tipped Tata into its first loss in three years in the quarter ended June 2018.
While Tata has announced plans to turn around JLR, the slide in the unit’s sales has continued.
The company took a non-cash charge of 278.38-billion rupees ($3.9bn) to cover the impairment at JLR in the three months to December 31. Changes in market conditions, especially in China, technology disruptions and the rising cost of debt resulted in the charge.
“Overall performance continued to be impacted by challenging market conditions in China. We continue to work closely with Chinese retailers to respond to current market conditions with a ‘Pull’ based approach to vehicle sales,” JLR CEO Ralf Speth said in a statement on Thursday.
JLR said last month it would cut 10% of its workforce, mostly in its home market, as Britain’s biggest car maker responded to lower Chinese demand and a slump in European diesel sales.
Tata’s loss came in at 269.93-billion rupees ($3.78bn) for the three months ended December 31, compared with a profit of 11.99-billion rupees a year ago. Revenue rose 5.8% to 762.65-billion rupees.
Tata has been facing a decline in sales in India as well.