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Tata to shed 1,100 Jaguar Land Rover jobs after coronavirus hits earnings

BENGALURU — India's Tata Motors Ltd expects to shed about 1,100 temporary jobs at Jaguar Land Rover after it raised the cost-cutting target at its luxury unit by 1 billion pounds ($1.26 billion) to ride out the disruptions caused by the coronavirus outbreak. Tata Motors expects to save 5 billion pounds in costs by March 2021 at its Jaguar Land Rover (JLR) unit, the Indian automaker's Chief Financial Officer PB Balaji said on Monday, adding 3.5 billion pounds of the savings had already been achieved. It will also reduce capital expenditure at JLR to 2.5 billion pounds for the current fiscal year, from the more than 3 billion pounds it has spent annually in previous years. "Conserving cash and prioritizing capital expenditure, and targeting investment spending to the right areas is our focus," Balaji told reporters, after the company posted a fourth quarter loss. We anticipate that up to 1,100 agency employees will be affected, a JLR spokeswoman said in a separate statement. Tata Motors is reviewing all its businesses and would consider exiting those that do not add strategic value, as part of a broader effort to save 60 billion rupees ($789 million) in its domestic business in the fiscal year to 2021. The automaker on Monday posted a consolidated fourth quarter net loss of 98.94 billion rupees, as coronavirus lockdowns across its markets ravaged sales, including at JLR. Total revenue from operations fell 27.7% to 624.93 billion rupees in the quarter, which ended March 31. JLR, which contributes the bulk of Tata Motors' revenues, reported a pre-tax loss of 501 million pounds for the period after it took a hit of 800 million pounds because of the novel coronavirus, Balaji said. He said there were signs sales were recovering in China, one of JLR's biggest markets, as well as in the United States and in Europe, with strong orders for Land Rover's sport-utility vehicle Defender and Range Rover's Evoque. JLR's boss Ralf Speth, who has led the company since 2010, will step down from his role at the end of his contract term in September. ($1 = 76.0446 Indian rupees) ($1 = 0.7954 pounds) (Reporting by Chandini Monnappa in Bengaluru and Aditi Shah in New Delhi; Editing by Shounak Dasgupta and Sriraj Kalluvila)

Jaguar-Land Rover rules out downsizing into new segments

Jaguar-Land Rover (JLR) will continue expanding its portfolio of models during the 2020s, but the group confirmed it won't chase volume by branching out into smaller segments like its German rivals. The two brands will instead seek partnerships to generate economies of scale. "We should not and will not drive down into segments just to get economies of scale," said Felix Brautigam, Jaguar-Land Rover's chief commercial officer, in an interview with Autocar. He added the second-generation Range Rover Evoque (pictured) released in 2018 is already a relatively small car. It stretches 172 inches from bumper to bumper and 75 inches from side to side, so it's approximately 4 inches longer and 5 inches wider than the eighth-generation Volkswagen Golf. It's about 8 inches taller than the German hatchback, however. While that's small by luxury car standards, Mercedes-Benz and BMW respectively went smaller with their Smart and Mini brands. Audi doesn't have an entry-level sub-brand, but it doesn't need to because it's part of the gigantic Volkswagen Group. Japanese luxury firms like Lexus and Infiniti are also part of bigger companies. Brautigam's comments bury numerous rumors. They confirm Jaguar won't take on the Mercedes-Benz A-Class, the Audi A3, and the BMW 1 Series with a model positioned below the XE, which competes against the C-Class, the A4, and the 3 Series, respectively. They also douse cold water on the born-again Freelander (which ultimately morphed into the LR2 in America), which Land Rover was allegedly developing to slot directly below the aforementioned Evoque. Ironically, JLR might soon have access to platforms capable of underpinning smaller vehicles. Parent company Tata Motors is actively looking for an outside company to link arms with the British brands, according to a separate report. Officials reportedly approached BMW -- which used to own Land Rover, and announced a joint-venture with the group in 2019 -- and Geely, the Chinese giant whose portfolio of brands includes Volvo, Polestar, Lotus, Proton, London Taxi Company, Terrafugia, and half of Smart, plus a sizeable, nearly-10% stake in Mercedes-Benz parent company Daimler. Geely told Bloomberg it hasn't heard from Tata or JLR. BMW and Tata remained silent. While a partnership with someone looks likely considering the significant hurdles faced by JLR, its parent company has categorically ruled out selling the duo it purchased from Ford for $2.3 billion in 2008.

Jaguar Land Rover hands Tata the biggest loss in Indian corporate history

BENGALURU/NEW DELHI — Jaguar Land Rover's owner Tata Motors Ltd stunned markets by posting the biggest-ever quarterly loss in Indian corporate history of about $4 billion on slumping China sales, sending its shares crashing as much as 30 percent. Tata Motors also warned that the Jaguar Land Rover (JLR) unit, which brings in most of its revenue, would swing to an operating loss for the year versus an earlier projection it would break even, given weak sales at the luxury British carmaker. JLR's China retail sales were cut almost in half in the December quarter as overall demand in the world's biggest auto market contracted last year for the first time since the 1990s. The firm has also been buffeted by Brexit woes and weaker business for diesel cars that account for bulk of its sales in Europe. Tata Motors turned in a third-quarter loss of 269.93 billion rupees ($3.8 billion) on Thursday, more than half its current market capitalization of $6.1 billion, mostly due to a massive impairment at JLR. Analysts were expecting a profit. "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 on a conference call on Thursday. JLR has taken steps to address the slide in China sales by changing its strategy to focus on profits for dealers instead of sales and incentivising retail sales over wholesale, he said. "We are encouraged by continued demand for the refreshed Range Rover and Range Rover Sport," JLR Chief Commercial Officer Felix Brautigam said in a statement. "With deliveries of the new Evoque due to start later this quarter, we look forward to building momentum." But analysts expect JLR to struggle to generate profit with China's economy projected to slow further this year after growth eased to its weakest pace in almost three decades in 2018. JLR's overall retail sales in January plunged 11 percent. The dour numbers prompted Tata investors to make a beeline for the exits as markets opened on Friday, with shares of the company skidding to their lowest in nine years at one point. The stock was down about 20 percent by 0720 GMT near 150 rupees, on track for its sharpest drop since 2003. At least four brokerages cut their price target for Tata Motors shares after its quarterly loss. Analysts at Jefferies pegged the stock at 250 rupees, versus an earlier target of 300 rupees, citing weak performance at JLR.