Tata Motors swings to $4.7m consolidated profit
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India's Tata Motors swings to $4.7m consolidated quarterly profit, driven by cost cutting
MUMBAI, India - MUMBAI, India (AP) — India's Tata Motors said Friday that it swung to profitability on a consolidated basis for the September quarter after months of deep losses, thanks to aggressive cost-cutting and reviving sales of its Jaguar and Land Rover brands in the United Kingdom.
"We see signs of stabilization and improvement," said Chief Financial Officer C. Ramakrishnan. "Cost-reductions at Jaguar Land Rover should benefit us in the coming quarters."
Net profit for the quarter that ended in September was 217.8 million rupees ($4.7 million), up from a loss of 9.4 billion rupees ($201.7 million) during the same period last year. During the April to June quarter, the company suffered a loss of 3.29 billion rupees ($70.4 million), on a consolidated basis.
Revenues fell to 218.1 billion rupees ($4.7 billion) for the September quarter from 239.4 billion rupees ($5.1 billion) during the same period a year ago.
Losses at Jaguar and Land Rover have weighed on Tata Motors since it acquired the brands from Ford Motor Co last year.
Jaguar Land Rover has cut about 2,500 jobs in the past year, frozen pay and canceled bonuses. In September, the company announced it would close one of its factories in England, angering unions.
"Any automobile company, including Jaguar Land Rover, will have to reduce the break-even point to be competitive and survive," non-executive vice-chairman Ravi Kant said Friday.
Jaguar Land Rover's net loss shrank to 60 million pounds ($98.3 million) during the September quarter, from 64 million pounds ($104.9 million) the prior quarter, thanks to cost cutting and growing sales.
Wholesale sales grew 23 percent, to 44,300 vehicles, up from 35,900 vehicles the prior quarter.
The U.K. led retail sales growth for Jaguar Land Rover, rising 34.2 percent, to 14,400 vehicles. North American sales slid 7.3 percent to 9,600 vehicles. China sales grew 2.1 percent to 3,400 vehicles.
Tata's Jaguar Land Rover subsidiary has 90 billion rupees ($1.9 billion) in outstanding debt, 43 percent of the company's total.
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