Tata Motors, the Indian owner of Jaguar Land Rover (JLR), has reported a surprise quarterly loss of more than $1 billion (€820 million).
This is stark in comparison to analysts’ expectations that the company would make a $365.4 million (€299.3 million) profit during Q1.
It came despite JLR sales in China jumping 127 per cent compared to the same period the year before. Tata Motors’ overall retail sales, which account for the majority of its revenue, rose 12.4 per cent.
According to Tata, the UK-based luxury car business saved around $426 million (€349 million) during the quarter under its “Project Charge” plan.
The losses are largely attributed to “exceptional items”, including asset write-downs and restructuring costs. The company wrote off $2.1 billion (€1.7 billion) related to its revamp of JLR.
More recently, the global semi-conductor shortage has continued to impact production. Last month JLR temporarily halted production at its two main UK factories due to a chip shortage.
Shifting demand over COVID, including massively increased demand for laptops and other devices using semiconductors as people shift to working and learning from home, has seen some of the world’s biggest car manufacturers being forced to suspend production.
The devastating second wave of the COVID pandemic in India could also impact corporate earnings for Tata, as several parts of the country re-impose lockdown restrictions and customer sentiment suffers.
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