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Jaguar owner Tata Motors has fourth loss in five quarters as hurdles mount
[NEW DELHI] Jaguar Land Rover owner Tata Motors reported its fourth loss in five quarters as the British luxury carmaker's problems are increasingly taking a toll on the parent.
The loss of 37 billion rupees (S$733.22 million) for the three months ended June 30 compares with a deficit of 19 billion rupees a year earlier. Analysts on average expected a loss of 20.36 billion rupees at Tata Motors, part of salt-to-software conglomerate Tata Group of India.
"It's been a challenging quarter," chief financial officer PB Balaji said in a conference call with reporters. "As far as JLR is concerned, we are seeing China stabilising, and we expect to see growth from here on as far as Chinese business is concerned."
The persistent losses underscore an intensifying struggle by the iconic British automaker to deal with slumping demand in China and an industrywide shift toward cleaner fuels, which is hitting Jaguar Land Rover particularly hard. Adding to the challenges is renewed uncertainty in the UK, where new Prime Minister Boris Johnson has vowed to deliver Brexit in less than 100 days, even if that means exiting the European Union without a divorce deal.
A hard Brexit could cost UK's auto industry US$63,750 every minute, as friction at the border will leave plants starved of parts. Meanwhile, the owner of Jaguar sports cars and Land Rover sport-utility brands has been one of the biggest victims of a slowing Chinese car market, with its deliveries to dealerships plunging for 12 consecutive months.
The US-listed shares of Tata Motors were down 3.7 per cent in pre-market trading. They closed 4.6 per cent down to 144.30 rupees on Thursday in Mumbai before the results were announced.
JLR is also particularly vulnerable to the shift away from combustion engines across the world, and its woes have forced Tata Motors to explore strategic options for the luxury brand, including a potential stake sale, people familiar with the matter have said. Every JLR model will have an electric version by 2020, Mr Balaji said.
JLR had a pretax loss of £383 million (S$651.8 million), before exceptional items, during the quarter, compared with a £264-million loss in the year earlier period, Tata Motors said in a statement.