(Bloomberg) — Tata Motors Ltd., the Indian owner of Jaguar Land Rover, posted a quarterly loss as the global semiconductor shortage continued to hit production at home and at its British luxury unit.
The company posted a loss of 15.2 billion rupees ($204 million) for the three months ended Dec. 31, compared with a 29.1 billion-rupee profit in the same period a year earlier. JLR reported a deficit of 9 million pounds ($12 million) before tax during the quarter, versus a profit of 439 million pounds last year, Tata Motors said in a statement to stock exchanges Monday.
The semiconductor shortage will likely ripple through 2022 and gradually improve as capacity within the supply base increases, Tata Motors said. Jaguar Land Rover is working with first-tier suppliers and chip manufacturers to secure longer term supply, it added.
The chips dearth has hit output across the world’s car industry, which is also reeling from the devastation of the pandemic. The shortfall is expected to wipe out $210 billion in sales last year, with production of 7.7 million vehicles lost, consulting firm AlixPartners forecast in September. In addition to supply-chain snags, higher commodity prices have also hurt automakers.
JLR expects profits to improve with a positive cash flow in the fourth quarter, according to the statement. The luxury unit is also on track to achieve its target of reaching an earnings before interest and taxes margin of 10% or more by the year ending March 31, 2026.
Jaguar’s success is crucial for Tata Motors, which saw shuttered factories and dealerships last year after the government enforced strict stay-at-home measures to curb the virus’s spread. India has reported more than 41 million Covid cases and nearing half a million deaths through Monday.
JLR set up a “full-time mission control center” to limit the damage from the chip shortage, Chief Financial Officer Adrian Mardell said in July. JLR’s retail sales for the third quarter plunged 37.6% to 80,126 vehicles from a year ago, while sales in China fell 6.9% compared to the preceding quarter.
JLR plans to electrify its lineup and ditch combustion engines at Jaguar, the smaller of its two brands, by 2025. Land Rover will get its first fully electric model in 2024. Tesla Inc. is helping JLR meet European Union rules governing greenhouse gas emissions from cars and sport utility vehicles.
The local electric-vehicle business of Tata Motors attracted investments from TPG and others in October. The company will invest about $2 billion over five years in its electric vehicle unit, Chief Financial Officer P.B. Balaji said in October. The firm aims for 20% of total sales to be electric by 2026, with plans to roll out 10 battery-powered models by that time.
(Updates with company comments from third paragraph.)
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
