Tata Motors’ net loss widens – inflation, China lockdowns to blame says company

• Auto maker continued to widen its consolidated net loss by five times to ₹4,950 crore.
• The company attributed the sharp increase in losses to inflation, China lockdowns, chip shortage, and volatile forex and commodity prices.
• While Tata Motors subsidiary JLR remained under the woods, the company’s India business continued to do well with strong passenger vehicle sales.

Auto major Tata Motors missed analyst estimates as its net loss widened by five times to ₹4,950 crore as against ₹992 crore loss reported in the previous quarter.

Its revenue dropped 8.3% to ₹71,934 crore during the June quarter as against ₹78,439 crore last quarter on account of lower sales from its British subsidiary Jaguar Land Rover.

Tata Motors attributed the sharp increase in losses to inflation, China lockdowns, chip supply issues, and volatile forex and commodity prices.
Source: Company reports

India biz sees strong momentum – with passenger EVs buzzing fast
While Tata Motors subsidiary JLR remained under the woods, the company’s India business continued to do well with strong passenger and electric vehicle sales.

Its Indian PV business remained strong with revenues jumping 122% year-on-year, due to strong demand. The automaker said its PV segment will continue to drive strong performance and sustain profitability and cash flow improvement measures.

Meanwhile, the electric vehicles space at Tata Motors continues to perform well as the company sold 9,310 units in Q1 FY23, more than twice of what it sold in the entire FY21 (4,218).

Despite concerns over inflation and geo-political situation, Tata Motors says that demand is strong and chip supply is expected to improve from next quarter. Moreover, a cool off in commodity prices after a sharp rise will support margins going ahead.

Sales
Source: Company reports

JLR woes continue to mount – but outlook remains positive
Retail sales at JLR in June quarter were 78,825 vehicles, broadly flat sequentially and down 37% on year. Revenue was down nearly 8% on year at £4.4 billion.

This was “impacted by supply challenges including semiconductor shortages, slower than expected ramp-up of the New Range Rover and New Range Rover Sport production and China lockdowns,” said the company.

JLR CEO Thierry Bolloré struck an optimistic note, but he seems to have an answer only to the chip shortage, not the other issues the Tata Motors subsidiary is staring at.

“Although headwinds from the global semiconductor supply and Covid lockdowns in China have impacted our business performance this quarter, I am pleased to confirm that we have a completely reinforced organization setup to respond to the semiconductor crisis,” he said.

On the bright side, Tata Motors China joint venture achieved positive operating margin in June quarter despite the lockdown.

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