The Hindu : Business : Tata Motors reports Rs. 2,500-crore loss

Online edition of India's National Newspaper
Saturday, Jun 27, 2009
ePaper | Mobile/PDA Version

Business

Business

Tata Motors reports Rs. 2,500-crore loss

Special Correspondent

Jaguar-Land Rover acquisition impacts performance

Posts loss for the first time in eight years
Will introduce JLR vehicles in India on Sunday

— PHOTO: VIVEK BENDRE

CORRECTIVE ACTION: Ravi Kant (centre), Vice-Chairman, with P. M. Telang (right), Managing Director-India Operations, and C. Ramakrishnan, Chief Financial Officer, Tata Motors, at a press conference in Mumbai on Friday.

MUMBAI: Tata Motors’ consolidated performance in 2008-09 has been hit by the Jaguar-Land Rover (JLR) acquisition as the company reported a loss for the first time in eight years at Rs. 2,505 crore against a profit of Rs. 2,167 crore in the previous year. The company’s consolidated gross revenue was significantly higher at Rs. 74,151.21 crore against Rs. 40,340.80 crore. The numbers are not comparable as the previous year’s figures did not include that of Jaguar-Land Rover.

Last month, Tata Motors’ standalone numbers saw net profit dip by 50 per cent to Rs. 1,001 crore.

For the year, Tata Motors reported an operating loss (consolidated) of Rs. 658 crore against an operating profit of Rs. 3,401.14 crore and a notional exchange loss of Rs. 339.30 crore against a gain of Rs. 160.73 crore on revaluation of foreign currency borrowings, deposits and loans given.

Addressing the media, C. Ramakrishnan, Chief Financial Officer, Tata Motors, said the JLR unit had posted a net loss of 281 million pound sterling in the 10-month period ending March 2009. JLR, in fact, had made a profit in 2007 and continued to do so in the first half of 2008. “However, the global meltdown, especially after July 2008 with vehicle financing and demand drying up, impacted the auto industry worldwide, including Jaguar-Land Rover,” he said.

As part of the corrective action, Tata Motors had already laid off 2,000 workers at its JLR facilities and shut different plants for some time. “JLR has an employee strength of around 15,000 and we could consider further lay-offs considering how the situation evolves,” said Ravi Kant, Vice-Chairman, Tata Motors.

“We are now working on low cost sourcing and tight control over cash flows. In fact, low cost sourcing has begun in earnest and we have reached about a quarter of purchases made from such sources. To make JLR stand on its own feet, we are assisting and facilitating some major ‘belt-tightening’”, said Mr. Kant. “We will make sure that the breakeven point is reduced substantially through measures like restructuring”.

For the June 2008-March 2009 period, JLR sales were down 32 per cent at 1.67 lakh vehicles (2.46 lakh vehicles in the previous year) with Land Rover sales at 1.20 lakh units (1.98 lakh units) and Jaguar sales at 47,000 units (48,800 units).

New products

The company had a successful launch of the Jaguar XF last year and that had already sold 13,000 units.

“Next month, we will be launching the XJ sedan in London and looking for a similar response,” said Mr. Kant. The company will be launching the LRX Concept new Range Rover this year in Europe and will introduce its Jaguar-Land Rover vehicles in India on Sunday.

Printer friendly page
Send this article to Friends by E-Mail

Business