Mumbai: Tata Motors, India’s top vehicle maker, reported its first annual loss in eight years as it was hit by slumping demand and losses at the Jaguar and Land Rover unit it bought in 2008.
The firm, which controls 60% of the world’s fifth-biggest truck and bus market, said it was readying for a major belt-tightening as it looked to cut costs.
Tata Motors said Jaguar Land Rover unit posted a net loss of £281 million ($463 million) in the 10 months of the fiscal year to March 2009 that it was on its books, as a brutal global recession scuttled sales of cars, primarily the luxury and sports utility vehicles.
The economic crisis has sent two of America’s three big carmakers into receivership and is set to plunge Toyota Motor Corp deeper into loss.
The new president of Toyota on Thursday warned that the auto industry faces two more tough years.
In India, higher borrowing costs and an economic slowdown put the brakes on auto sales for much of 2008-09, though sales have improved since February.
Tata Motors reported a consolidated net loss for the year to March 2009 of Rs2,505 crore ($520 million) versus net profit of Rs2,168 crore a year ago.
Net sales rose to Rs70,370 crore versus Rs35,409 crore.
The numbers are not comparable as year-ago numbers did not include that of Jaguar and Land Rover, or other assets that Tata Motors bought and sold in the year.
Last month, the company reported net profit from Indian operations fell 50.7% to Rs1,001 crore for 2008-09.
Since completing the Jaguar Land Rover deal, Tata Motors has struggled for financing as the global credit crisis and economic downturn cut the availability of funds.
A rights share offer last year did not attract great interest, it deferred an overseas share issue and had to refinance a $3 billion bridge loan it had taken to buy the two marquee brands from Ford.
The firm, which has a line-up of the world’s cheapest car, the Nano, to some of most luxurious, said it had agreed to extend the final maturity of $1 billion by 18 months to end 2010.
Shares in the firm have more than doubled so far this year compared to a 51% rise in the benchmark index. The shares fell by three-quarters in 2008.