Tata Motors (TML) and Jaguar Land Rover (JLR) expect a significantly weak Q1 FY 2021 (April-July) with the impact of COVID-19 related lockdowns reflecting in its entirety on the results. The company anticipates gradual improvements in performance in the subsequent quarters and anticipates to become sustainably cash positive from FY2022.
The automaker states TML sales in the quarter so far have been limited but are expected to start recovering in June. It is also gearing up its supply chain accordingly.
In FY 2020, wholesales including exports declined by 35pc to 475,207 units compared to the previous year. The sector in India faced strong headwinds on the back of the slowing economy. Liquidy crisis, high fuel prices, a transition to BSVI compliant engines all dampened consumer sentiment and subdued demand for vehicles across segments.
Demand from China is already picking up momentum with sales amounting to 8,068 units in May, a rise of 4.2pc from May 2019. In April, vehicle sales stood at 6,828 units, a decline of 3.1pc from the prior-year period. Tata is thus gradually resuming production at its Solihull and Halewood plants, the engine plant in Slovakia and contract manufacturing line in Graz (Austria) to meet this recovering demand.
After profitable second and third quarters, the pandemic impacted JLR’s results for Q4. The company reported a net loss of £501mn ($633mn) in Q4 and £422mn in FY2020.
JLR and TML together posted a consolidated net loss of Rs98.64bn ($1.3bn) in Q4 (Jan-March) from a net profit of Rs11.09bn in the prior-year period.