Bengaluru: Tata Motors Ltd on Thursday posted a loss for the third-quarter, hurt by an impairment charge for its luxury car unit Jaguar Land Rover. The automaker's loss came at ₹26,993 crore ($3.78 billion) for the three months ended 31 December, compared with a profit of ₹1,199 crore in the year-ago period.
Revenue rose 5.8% to ₹76,265 crore, the company said.
Troubles at the Jaguar Land Rover (JLR) unit, which has been hit hard by US-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.
While Tata Motors has announced plans to turn around JLR, the slide in the unit's sales has continue for now.
The company took a non-cash charge of ₹27,838 crore ($3.90 billion) to cover the impairment at JLR in the three months to 31 December. Changes in market conditions, especially in China, technology disruptions and rising cost of debt resulted in the charge.
"...Overall performance continued to be impacted by challenging market conditions in China. We continue to work closely with Chinese retailers to respond to current market conditions with a 'Pull' based approach to vehicle sales," JLR CEO Ralf Speth said in a statement on Thursday.
JLR said last month it would cut 10% of its workforce, mostly in its home market, as Britain's biggest carmaker responded to lower Chinese demand and a slump in European diesel sales.
Tata Motors has been facing a decline in sales in India as well.
Fitch Ratings said on Wednesday placed the credit rating of Tata Motors Ltd on negative watch, stating increasing risks for its British luxury car unit — Jaguar Land Rover (JLR) — over a potentially chaotic Brexit.
This comes after the ratings agency placed the credit ratings of JLR, Britain's biggest carmaker, under review for possible downgrades. "Trade barriers and logistic issues from a disorderly Brexit could have an impact on JLR's competitive positioning and lead to significantly lower sales and profitability," the credit rating agency said, placing the parent's long-term issuer default rating on "rating watch negative".
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