Tata Motors Assures UK PM Theresa May About Commitment TO JLR

It was in July 2018, that Jaguar Land Rover Automotive announced that the UK Government needed to urgently provide certainty for business including guaranteed tariff-free access and frictionless trade with the European Union. Prof. Dr. Ralf Speth, CEO, Jaguar Land Rover had said back then "Jaguar Land Rover's heart and soul is in the UK. However we, and our partners in the supply chain, face an unpredictable future if the Brexit negotiations do not maintain free and frictionless trade with the EU and unrestricted access to the single market. We urgently need greater certainty to continue to invest heavily in the UK and safeguard our suppliers, customers and 40,000 British-based employees."

A couple of months later, in October 2018, Tata Motors, announced a turnaround plan for JLR which had been hit hard by trade tensions between China and the US, low demand for diesel cars in Europe and worries over Brexit. It was called 'Project Charge' and Tata Motors said it planned to cut costs and improve cash flows at Jaguar Land Rover by $3.2 billion in the next 18 months. JLR plans to launch several new vehicles but the big one will be the new Range Rover Defender which will be showcased soon. Over the next few years JLR will also offer a hybrid or electric version of all its models by 2020.

N Chandrasekaran, Chairman, Tata Motors Ltd. said, "JLR will continue to face global headwinds being experienced by the auto industry and to address them, the management is taking the right steps to drive operational excellence, whilst continuing to invest in innovative products and technology to stay competitive globally. There is no truth to the rumours that Tata Motors is looking to divest our stake in JLR or discontinue the Jaguar brand. We have great belief in the potential of JLR's distinctive premium products and brands as well as in JLR's design and engineering capabilities. We are confident that these inherent strengths, coupled with the focused efforts by the management to drive performance in the medium term by improving its operational leverage will help JLR deliver consistent, competitive and cash accretive growth in the coming years."

Also Read: Tata Motors Reveals Turn Around Plan For JLR

The company in fact seeks the support from the UK government for electric and driverless technology, and for building a battery factory in the Midlands region of England. Tata Motors made a loss of Rs. 10.49 billion for the July-September quarter, compared to a profit of Rs. 24.83 billion a year ago. JLR reported a loss of 101 million pounds during the quarter and its margin on earnings before interest, tax, depreciation and amortisation fell 130 basis points to 9.9 percent.

Retail sales of Jaguar saloons and Land Rover SUVs fell 13.2 percent to about 130,000 units, hurt particularly by tariff changes in China and escalating trade tensions.

As part of the turnaround plan, JLR will first focus on cash saving by reducing non-product investments and speeding up asset sales. In the near term it will improve efficiency in areas including purchasing and material cost, manufacturing and logistics and people and will focus on strategic and non-core asset sales. JLR has already reduced the number of production days at its UK plants in Castle Bromwich and Solihull.