Team-BHP
(
https://www.team-bhp.com/forum/)
It was only a matter of time but it's finally happened. JLR has pushed Tata Motors into the red.
JLR has made a loss of £210 million and this has contributed to Tata Motors recording a consolidated loss of Rs 1,862.57 crore against a profit of Rs 3,199.93 crore in the same period last year.
Declining sales along with reduced dealer stock levels are part of the reasons.
More on this here
From what I understand -
- JLR assembles cars and SUVs in China and had an import tariff advantage over others till now
- But China slashed tariffs on car imports (to please Europe) from 25% to 10% making imports cheaper
- JLR too had to slash prices to ensure sales do not fall much, thereby affecting profitability.
- China accounts for 25% of JLR sales.
It will take some time to do "cost rationalization" in China market to ensure profitability. In other markets, JLR problems are temporary in nature (Eg: high dealer inventory)
This may also be due to the influx of luxury SUV's from every car maker in the world. The competition is just too much.
Jaguar-Land Rover has made such enormous sums of money for Tata that we can ignore a quarter (or even year) of it being in the red. Plus, their cars are good (reliability aside). The designs continue to evolve nicely and they're expanding the lineup.
Quote:
Originally Posted by smartcat
(Post 4437158)
It will take some time to do "cost rationalization" in China market to ensure profitability. In other markets, JLR problems are temporary in nature (Eg: high dealer inventory)
|
Man, you really have a way of looking at & explaining things. I know I messaged you this yesterday, but you could surely have been an A+ professor.
Oddly, JLR quarterly presentation says China reducing duties is a positive for the company. I'm guessing they will now import certain slow selling and/or high value models directly from Europe. And perhaps assemble only fast selling models in China.
Quote:
Originally Posted by GTO
(Post 4438291)
but you could surely have been an A+ professor.
|
I wonder how that would have turned out! :)
Quote:
Originally Posted by smartcat
(Post 4437158)
From what I understand -
- JLR assembles cars and SUVs in China and had an import tariff advantage over others till now
- JLR too had to slash prices to ensure sales do not fall much, thereby affecting profitability.
- China accounts for 25% of JLR sales.
It will take some time to do "cost rationalization" in China market to ensure profitability. In other markets, JLR problems are temporary in nature (Eg: high dealer inventory)
|
This is a temporary problem and yet a strategic advantage if the Trump tariffs kick in! BMW and Mercedes will be hit and there will only be Audi and Volvo to contend with!
Was away and late to this party!
What is also hitting JLR? 1: The VW effect - Part 1 - Diesel is evil - As you all know, diesel sales are declining, nobody is buying due to the uncertainty of future city bans and also the fact that people cannot afford the run petrol SUV's. Notice the gap? Yep - no proper hybrid versions as yet
2: The VW effect - Part 2 - Bad Labs - Lab rats behave differently from real rats. Most cars are taxed as per emission ratings. As proven, VW performed well in the labs but not in real life so no one will get beaten in that game. The EU have brought in
WLTP ratings (World Harmonised Light Vehicle Testing Patterns) which test cars in real conditions. This kicks in from September. You would have seen pictures of Mercedes S Classes and VW Golfs with strange contraptions bolted on the rear on test in India - this is what is going on. As a result, some cars have been withdrawn for sale until testing is completed. Existing unsold inventory which has not gone through the WLTP are being registered and sold at discounts or dare I say it - being crushed or dismantled for parts. Some cars like the VW Golf R have had their power output strangled to meet emissions.
3: DPF Issues with transverse Ingenium diesel engines - Major issues with the Discovery Sport and Evoque with the DPF not getting heated due to its location leading to lots of warranty rework.
4: Distractions - Brexit, E-Pace, Vela, i-Pace - Too many models launched means more initially costs
Big bills but not chronic stuff except for item 1 - I hope
Tata owned JLR facing tough times due to falling sales – Turnaround plan revealed
Jaguar Land Rover reveals a turnabout plan which is expected to pull the company out of dire straits.
Jaguar Land Rover is going through what can be considered as its most challenging phase ever since the company was taken over by Tata Motors. The company was hit hard by trade tensions between China and the US followed by lower demand for diesel cars in Europe while Brexit added to its woes.
Jaguar Land Rover CEO, Ralf Speth has announced a turnaround plan for the company called ‘Project Change’. Tata Motors announces plans to cut costs and improve cash flows at Jaguar Land Rover by 2.5 billion pounds ($3.2 billion or Rs 22,700 crores) over the next 18 months.
Launch of new cars are on the cards among which will be the Jaguar I-Pace and Range Rover Defender; while a range of hybrid or electric versions of its models will be launched by 2020. These efforts will allow the company to lay foundations for long term sustainable growth.
During the period July to September quarter, sales volumes dipped 13.2% while the company reported loss of £90 million over the said period as against a profit of £385 million over the same three month period in 2017. Parent company Tata Motors stated that this financial performance could improve in the next half of this financial year but even this will leave Jaguar Land Rover in a break even situation with no profits for FY 2018-19.
In view of JLR being in the eye of the storm, the company has trimmed pre-tax profit expectations and already reduced number of production days at the company’s UK based plants in Castle Bromwich and Solihull. Over 40,000 British employees of the company also face the prospect of job cuts after JLR announced a £2.5bn plan to reduce costs and free up cash.
The company is also planning to reduce annual investments from £4.5bn to £4bn over the next two years while stock of finished cars it holds and its working capital by £500m will also be reduced. £1bn in costs will also be cut on recruitment and non-essential travel. Link
Sad to see Tata/JLR in this position.
Jaguar and Land Rover cars are every Enthusiasts' dream.
And Tata did every Indian proud by taking over JLR.
SDK's with proper SDK pricing in India can definitely act as a new impetus. Especially for the XE
Interesting development. Chery seems to be have realized that Tata Motor's cannot come up with the huge amount of investment that would require to electrify JLR. Making EV cars at scale is definitely not easy. Even though the I-Pace is the first off the mark among the European premium manufacturers, it's power-train efficiency is nowhere industry standards established by Tesla.
China is JLR's largest market, and from next year onward every car manufacturer in China will have to hit strict plug-in quotas of their total sales.
There is a talk of JLR eventually moving onto becoming an all-EV premium brand, to survive and that will require a lot of money.
Maybe, Chery will make an offer Tata cannot refuse?
Quote:
Chinese Arm of Jaguar Land Rover Commits to Sizable $1 Billion EV Investment
The Chinese wing of Jaguar Land Rover (JLR), Chery-JLR, signed an agreement Thursday to invest ¥7 billon RMB ($1 billion USD) in its manufacturing facility based in Changshu.
Chery's facility there is the only complete JLR vehicle plant outside the United Kingdom and has a maximum annual production capacity of 200,000 internal combustion-powered vehicles, according to China's Gasgoo. Its investment in the plant will modernize the body workshop and convert the plant into a new energy (electric, hydrogen, et cetera) powertrain manufacturing site. The plan will also add a research and development center for these powertrains, complete with a test track. According to Autocar, this facility will be the home for all of JLR's EV operations on completion, from conception to production.
JLR's success with electric vehicles has so far been mixed. Its I-Pace electric crossover was so good that it deprived The Drive's Mike Guy of sleep, but the vehicle also suffers from efficiency below expectations, suspected to either be a software-locked battery or inefficient electric motors. JLR's electric powertrain technology needs to mature before it can mount a serious challenge to premium electric automakers and industry leaders Tesla and Porsche as it reportedly hopes to do within a decade.
Its plan will reportedly involve a gradual elimination of internal combustion engines from its lineup, concluding with the termination of the J-Pace in 2027. Reports as to whether the next F-Type will retain its internal combustion powerplant for the entirety of its product cycle conflict; some allege it'll go electric with the rest, others that it will use a BMW-sourced V-8. Like the rest of the industry, electric power will be crucial to JLR's future, and its Changshu investment symbolizes its acknowledgment of that need.
|
http://www.thedrive.com/news/25144/c...-ev-investment
Jaguar Land Rover Struggles Drop Tata Further Into Junk Rating.
Quote:
S&P Global Ratings lowered the credit rating of Tata Motors and its Jaguar Land Rover unit deeper into junk , citing weaker-than-expected profitability at JLR.
|
Quote:
S&P said recently launched and upcoming products may help to prop up growth but competition in the luxury car market may hurt margins.
S&P expects Tata Motors' leverage to deteriorate over the next 12-18 months, given its ongoing cash losses at JLR.
|
Link
Jaguar Land Rover plants to close for week in April due to Brexit.
The shutdown of UK's biggest car manufacturer will be its second in six months, coming soon after the 29 March Brexit deadline.
Quote:
The company, which employs 44,000 in the UK and cut 1,000 temporary workers at its plant in Solihull last year, has been hit by poor sales in China and a drop in demand for diesel cars.
|
Link
Jaguar Land Rover hands Tata the biggest loss in Indian corporate history of about $4 billion
Quote:
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.
|
LINK
Tata Motors JLR posts GBP 3.6bn loss.
Quote:
Tata Motors-owned Jaguar Land Rover (JLR) on Monday posted an annual loss of 3.6 billion pounds, largely attributed to a nearly six per cent "weak" demand for its luxury car models in China
|
Link
| All times are GMT +5.5. The time now is 08:43. | |
