The share price of Indian conglomerate Tata Motors fell 17 per cent today after it posted the biggest-ever quarterly loss in Indian corporate history of about £3.1bn.
The loss was triggered by falling Chinese demand for Jaguar Land Rover’s (JLR) cars, the main source of Tata Motors’ revenue.
Tata said JLR would post an operating loss in the year to March after having previously projected a breakeven.
JLR’s China retail sales almost halved in the quarter as demand for cars from the Asian economic powerhouse shrank for the first time since the 1990s.
“We are now taking clear and decisive actions in JLR to step up its competitiveness, reduce costs and improve cash flows and make the business fit for the future,” chief financial officer PB Balaji told reporters.
JLR’s Chinese sales, which account for roughly one-in-seven of its global sales, fell 40 per cent year-on-year, which offset growth in the US and British markets. US sales rose 20 per cent and 18 per cent in the UK.
The firm said “significant market, technological and regulatory headwinds” were affecting the sector, while investment in new models and changing technology was still high.
JLR chief executive Ralf Speth said: “This accounting adjustment is consistent with the other decisive actions that we must take… enabling Jaguar Land Rover to counter the multiple economic, geopolitical, technological and regulatory headwinds presently impacting the automotive industry.”
He added that JLR reported strong third quarter sales in the UK and North America “but our overall performance continued to be impacted by challenging market conditions in China”.
JLR sold 144,602 vehicles in the last quarter, down six per cent year-on-year.