Tata Motors skids to Rs 2,500-cr loss
TATA Motors suffered its first annual loss in eight years and announced more job cuts and plant closures at Jaguar and Land Rover as the worst global recession in more than seven decades slashed demand for the marquees purchased by the company last year.
Tata Motors, the maker of Indica and Nano cars, posted a consolidated loss of Rs 2,500 crore for the year ended March while sales slumped 37%. The last time the company had made a loss was in 2000-01 when it experienced a similar demand slump for trucks and its small car, the Indica.
Jaguar and Land Rover posted a loss of Rs 1,777 crore for the year. The deepening recession in the US and UK worsened the demand for luxury vehicles forcing Tata Motors to cut jobs and consider plant closures. JLR has already shed 2,000 jobs and Tata Motors senior executives warned on Friday that more would be needed. Ford sold JLR to Tata Motors for about $2.4 billion in June last year. Tata Motors gained access to complex luxury car technology, two iconic but jaded brands and a distribution system in the world’s wealthiest countries. It also inherited a high-cost workforce and a market, which was witnessing a steep drop in demand for high-end cars.
Jaguar sales for the year fell 4% to 47,000 while Land Rover sales crashed 40% to 1.2 lakh units.
Q-Why the first loss in 8 yrs?
A net loss of Rs 1,777 crore suffered by Jaguar-Land Rover due to skidding sales on weak demand for luxury cars.
Q-What effect will it have?
More steps to trim costs, including plant closures and job cuts at UK ops. JLR has already shed 2,000 jobs
Source: ET
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