Published on May 20th, 2021 | by Daniel Sherman Fernandez0
Tata Motors Posts USD1 Billion Loss As Jaguar Costs Hit Bottom Line
Britain’s largest car manufacturer Jaguar Land Rover (JLR) is owned by Tata Motors and they have just reported a 20.5 percent increase in revenue, led by a strong sales performance in China. However, the ‘parent’ company Tata Motors is showing some troubling results.
In February this year, JLR said it would lay off 2,000 employees in the financial year 2021-22, as the brand plans to go head on into fully electric vehicles only from 2025.
In February this year, JLR management announced the ‘Reimagine Plan’. The ‘Reimagine plan’ will be the electrification of both Land Rover and Jaguar brands on separate architectures with two clear, unique personalities.
In a Land Rover, vehicle and driver are united by adventure. By breaking new ground, confronting new challenges and not being content with the expected, Land Rover truly helps people to go ‘Above and Beyond’. In the next five years, Land Rover will welcome six pure electric variants as it continues to be the world leader of luxury SUVs through its three families of Range Rover, Discovery and Defender. The first all-electric variant will arrive in 2024.
By the middle of the decade, Jaguar will have undergone a renaissance to emerge as a pure electric luxury brand with a dramatically beautiful new portfolio of emotionally engaging designs and pioneering next-generation technologies. Jaguar will exist to make life extraordinary by creating dramatically beautiful automotive experiences that leave its customers feeling unique and rewarded. Although the nameplate may be retained, the planned Jaguar XJ replacement will not form part of the line-up, as the brand looks to realize its unique potential.
Jaguar and Land Rover will offer pure electric power, nameplate by nameplate, by 2030. By this time, in addition to 100 percent of Jaguar sales, it is anticipated that around 60 percent of Land Rovers sold will be equipped with zero tailpipe powertrains.
Jaguar Land Rover’s aim is to achieve net zero carbon emissions across its supply chain, products and operations by 2039. As part of this ambition, the company is also preparing for the expected adoption of clean fuel-cell power in line with a maturing of the hydrogen economy. Development is already underway with prototypes arriving on UK roads within the next 12 months as part of the long-term investment programme.
Sustainability that delivers a new benchmark in environmental and societal impact for the luxury sector is fundamental to the success of Reimagine. A new centralized team will be empowered to build on and accelerate pioneering innovations in materiality, engineering, manufacturing, services and circular economy investments.
Annual commitments of circa £2.5bn will include investments in electrification technologies and the development of connected services to enhance the journey and experiences of customers, alongside data-centric technologies that will further improve their ownership ecosystem.
Meanwhile, Tata Motors’ share price has surged 78 percent in 2021 so far, boosted by expectations of a sustained recovery in profitability. Its shares closed over three percent higher in Mumbai Tuesday ahead of the earnings announcement.
The automotive giant’s revenues jumped 42 percent, but exceptional costs worth USD2.13 billion (Rs 15,559 crore), related to its restructuring of JLR hurt its profitability. “It was a strong and resilient all-round performance for us, despite the pandemic,” P.B. Balaji, chief financial officer of Tata Motors, told reporters in a post-earnings conference call.
The company reported losses for three consecutive quarters last year, as the pandemic hammered demand in domestic and international markets.
But an easing of coronavirus restrictions saw the firm’s revenues soar between October 2020 and March this year, as consumers splashed out on big-ticket items.
Renewed lockdowns triggered by a ferocious second pandemic wave in India have dampened demand for vehicles yet again, with automobile makers including Tata Motors announcing temporary plant shutdowns.
“We will continue to remain vigilant about the evolving Covid situation,” the company’s CEO and managing director Guenter Butschek said in a statement.
Butschek is due to step down on June 30 of this year with uncertainty mounting over the firm’s leadership after his replacement Marc Llistosella backed out of the role in March citing “personal reasons”.