Tata Motors has reported a record-breaking loss. It cited some problems in its Jaguar Land Rover unit.
The group reported a loss amounting to 270 billion rupees (£2.9 billion) for the third quarter of this financial year. It is considered as the biggest loss that is recorded in Indian corporate history.
The shares in Tata dropped by as much as 30 percent – the largest decline in a period of 26 years – after the firm revealed the figures.
The problems mostly stem from the Jaguar unit, which makes up the bulk of the revenue of Tata.
The group disclosed that the automotive industry is “facing significant market, technological, and regulatory headwinds.” It added that the investment in new models and technology remains high this year because of the weak sales, that sharply contrasts with the expectations that the British car maker would break even.
Earlier this year, JLR announced 4,500 job cuts, the majority of which will affect the workers in the United Kingdom.
The company has also warned that it requires more certainty around Brexit in order to continue investing in its operations in the United Kingdom It also said that a “bad Brexit” would cost the firm more than £1.2 billion in profit every year.
N Chandrasekaran, the chairman of Tata, stated: “In JLR, the market conditions continue to be challenging particularly in China.”
He added: “The company has taken decisive steps to step up competitiveness, reduce the costs and improve the cash flows while continuing to invest in exciting products and leading edge technologies. With these interventions, we are building Tata Motors group to deliver strong results in the medium term.”
PB Balaji, the chief financial officer of the company, stated: “We are now taking clear and decisive actions in JLR to step up its competitiveness, reduce costs and improve cash flows and make the business fit for the future.”
Tata acquired JLR for £1.15 billion way back in 2008. IT replaced Ford as the owner of the British brands.