(Bloomberg) — Jaguar Land Rover expects deliveries to recover as semiconductor shortages ease and the British automaker ramps up production of its luxury SUVs and sports cars.
The prediction follows a quarterly loss before tax of £524 million ($632 million), compared with a shortfall of £110 million a year earlier, parent Tata Motors Ltd. said Wednesday. JLR’s quarterly revenue fell 11% from a year earlier because of an aging model offering, inflation and adverse currency movements, the company said.
“Visibility on chip availability has improved quite significantly compared to what it was in the early part of May and June when China lockdowns were happening,” Tata’s Chief Financial Officer P.B. Balaji said on a media call. JLR expects to deliver 90,000 JLR cars in the current quarter, he said, an increase of 14% from the prior three months, .
Automakers globally are seeing signs of the supply crunch on semiconductors easing. Earlier on Wednesday, Mercedes-Benz AG raised its outlook for carmaking returns, saying demand will likely outrun supply for the rest of the year.
Sales of JLR vehicles slumped 37% to 78,825 units for the June quarter due to chip shortfalls and lockdowns in China, while demand for models like the the new Range Rover, Range Rover Sport and Defender remains strong.
The company is targeting a return of 5% on earnings before interest and taxes and £1 billion in free cash flow in the year through March 2023.
‘Progressively Improve’
Tata reported a loss of 50 billion rupees ($625.8 million) for the three months through June, missing an average analyst estimate of a 13 billion rupees loss.
“We expect the supply side, including that of critical electronic components to progressively improve,” Shailesh Chandra, managing director for Tata Motors’ Passenger Vehicles segment, said in the filing.
Tata Passenger Electric Mobility, a unit of Tata Motors, is planning to complete the acquisition of Ford Motor Co.’s plant in India by the end of financial year, Balaji said. Tata Motors’ electric vehicles that have no gasoline variants may be produced in the factory.
With the prices of commodities such as steel stabilizing, Tata Motors won’t be increasing the prices of its vehicles to the same extent it did in the past two years, Balaji said.
(Updates with Tata Motors CFO comments starting in third paragraph)
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