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Tata Motors' loss widens as pandemic hits car sales
[MUMBAI] Tata Motors, the Indian owner of British luxury carmaker Jaguar Land Rover, reported a wider loss on weak demand as Asia's third-largest economy remained shut for months following the coronavirus outbreak.
Tata Motors posted a loss of 3.14 billion rupees (S$57.8 million) in the three months ended Sept 30, widening from a 2.2 billion-rupee loss in the same period a year earlier. JLR reported a US$85 million profit before tax during the quarter, Tata Motors said in a statement to stock exchanges Tuesday.
JLR expects to be profitable into the second half of the financial year that ends in March 2021 backed by a cost-reduction plan, new model launches and sales in China, even as its outlook remains uncertain due to the Covid-19 pandemic, the luxury marque said in a statement. The carmaker has over £3 billion in cash, and expects to be free cash flow positive over the second half.
Tata Motors plans to cut the company's debt to "near zero" in the next three years.
Even before the Covid-19 pandemic shuttered dealerships and factories around the world, JLR struggled with stricter emissions limits and Brexit uncertainty.
Tata Motors may struggle to achieve an earnings turnaround in the coming quarters as persistent sales headwinds point to a long road to recovery for JLR, according to a Bloomberg Intelligence note.