JLR weighs down Tata Motors

Parvatha Vardhini C BL Research Bureau | Updated on July 31, 2018

Tata Motors came up with a disappointing performance in the quarter ended June 2018, recording a loss of ₹1,863 crore against a profit of ₹3,200 crore in the June 2017 quarter.

The tepid show came on the back of the Jaguar Land Rover (JLR) business seeing a loss before tax of £264 million (₹2,376 crore approximately).

Lower wholesale volumes due to planned inventory reduction, postponement of purchase by buyers in China to take advantage of a tax reduction being implemented in July, depreciation of the pound against the dollar as well as higher depreciation and amortisation expenses worked against JLR during the quarter.


Even as JLR wholesale volumes dropped 7 per cent during the quarter, retail volumes moved up by 5.9 per cent, aided by new models such as the new Velar and E-Pace and others such as the Discovery Sport and Ranger Rover Sport.

While retail demand in the US and the UK picked up showing a 2-3 per cent volume growth, high incentives in the US and issues such as Brexit and uncertainty over government policy for diesel vehicles in Europe and the UK remain a concern.

About 85 per cent of its vehicles sold in the UK and Europe are diesel vehicles.

However, JLR has a strong order book for about 5.5 months for the recently Iaunched I - PACE and about 3-4 months for the 2018 models of the Range Rover and Range Rover Sport.

It is also expecting a comeback of demand in China from the ongoing July- September quarter onwards.

JLR expects to achieve EBIT margins of 4-7 per cent over FY19-21. It stood at - (minus) 3.7 per cent in this quarter.

Published on July 31, 2018

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