Not a bleak picture: Tata Motors Vice Chairman Ravi Kant
INDIA’S leading vehicle maker Tata Motors reported yesterday a first-quarter net loss for the three months to June, hit by weak sales of its British premium brands Jaguar and Land Rover.
The company posted a consolidated net loss of Rs3.28bn (£41m/$66m) in the three months to June after logging a net profit of Rs7.19bn (£90m/$146m) in the same period a year ago.
The company said the numbers were not directly comparable to the year-earlier quarter as the Jaguar and Land Rover brands were acquired in June 2008.
"Continued adverse global automotive market conditions have resulted in an overall reduction in Jaguar Land Rover (JLR) volumes during the quarter," the company said in a statement.
Tata Motors bought the British luxury motoring icons Jaguar and Land Rover from ailing Ford Motor Co. last year for £1.4bn ($2.3bn).
The foreign unit showed a loss before other income, tax and exceptional items of Rs8.73bn (£109m/$178m) in the quarter as demand for cars fell across the US and Europe.
"It may appear to be a bleak picture but the overall position is better than earlier," Tata Motors vice chairman Ravi Kant told reporters in Mumbai yesterday.
Commenting on Jaguar Land Rover presence in India, Tata Motors president Rajiv Dube said they had an order book of 140 Jaguar Land Rover cars for the year.
"The numbers should improve slowly, we plan for a presence in six cities," Dube added.
Earlier this month, Tata Motors said it had secured private funding of £175m ($288m) for Jaguar and Land Rover, meaning the firm will no longer be seeking state help.
Consolidated net sales for the group quarter rose to Rs162.89bn (£2.4bn/$3.3bn) from Rs144.1bn (£1.8bn/$2.9bn).
Tata Motor's standalone Indian operations earlier announced a 58 per cent jump in profit to Rs5.13bn (£65m/$105m) for the three months to June owing to lower raw material costs, new models and an accounting change.
Analysts are not convinced that the worst is over for the group, which is saddled with debt after the Jaguar-Land Rover acquisition.
"The losses just keep coming," Mahantesh Sabarad, auto analyst with Centrum Broking told reporters.
Sabarad said Jaguar and Land Rover global sales would have to touch 225,000 cars for the group to break even.
Jaguar Land Rover global sales dropped nearly a third in the 10 months to the end of March to 167,000 vehicles, Tata Motors had said in June, when the premier brands were launched in India.
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