Jag, Rover drive Tata Motors deep into red
01 September 2009
Tata Motors on Monday announced a consolidated net loss of Rs328.78 crore for the first quarter ended 30 June thanks to plummeting sales at its subsidiary Jaguar Land Rover, which were down by as much as 52 per cent from the previous quarter.
Tata Motors said the result was not comparable to the previous fiscal's corresponding quarter, as the acquisition of the two marquee brands from Ford Motor Co was concluded in June 2008 (just before the global economic meltdown). Gross revenue in the quarter was Rs16,954 crore, up from Rs15,496 crore. The company had reported a net profit of Rs720 crore for the corresponding quarter last year.
JLR's wholesale sales were down to 35,900 units, while retail sales stood at 47,200 units. The new models of JLR, which will be available in the second half of 2009, are expected to boost the company's sales.
''We need a little support from the market (for the turnaround of JLR) given the drop in sales,'' said company vice-chairman Ravi Kant at a press conference in Mumbai, adding that the ''real activity on the ground is yet to begin''.
''I have no doubt that JLR will be a profitable company when the markets revive. We are taking steps to offset losses in retail and adjust stocks in line with retail sales,'' he said.
The company has tied up with Burdale Financial, Standard Chartered Bank of Baroda, and GE Capital for JLR's working capital needs. The company said it was close to sealing a deal with a consortium of banks for a fresh line of credit for the two British brands.