Tata Motors also warned that the Jaguar Land Rover (JLR) unit, which brings in most of its revenue, would swing to an operating loss in the year to March versus an earlier projection for breakeven, given weak sales at the luxury British carmaker. -China trade tensions, low demand for diesel cars in Europe and Brexit worries, had tipped Tata Motors into its first loss in three years in the quarter ended June 2018.
The company, which employs 18,500 manufacturing staff in the Midlands and Merseyside, last month said it will cut 4,500 jobs in response to the challenges.
It announced yesterday a net loss of 270 billion rupees (US$3.8 billion) for the quarter ending December owing to a US$3.9-billion write-down on JLR.
"We continue to work closely with Chinese retailers to respond to current market conditions".
The company is pinning its hopes of a short-term turnaround on returning to sales growth in China, alongside its cost-cutting programme.
"The automotive industry is facing significant market, technological, and regulatory headwinds".
Given the falling for its vehicles JLR has decided that capital investment should be adjusted down, resulting in a non-cash £3.1bn pre-tax exceptional charge and an overall pre-tax loss of £3.4bn for the quarter. "For Jaguar Land Rover, it will be catastrophic if Britain goes for a no-deal Brexit". "Despite the muted growth, Tata Motors has delivered strong results, registered an impressive profitable growth this year on the back of exciting products, renewed brand positioning and aggressive cost reduction".
The company continues to invest in new vehicles, electrification, and technology.
Jaguar Land Rover is under pressure on several fronts.
As part of the plans, JLR last month announced investments worth hundreds of millions of pounds to produce electric drive units at Wolverhampton.
"This is a hard time for the industry, but we remain focused on ensuring sustainable and profitable growth, and making targeted investments, that will secure our business in the future", JLR chief executive Ralf Speth said commenting on the quarterly results.
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