Tuesday, 4 October, 2022

India’s Tata Motors extends losses on rising costs, chip woes

MUMBAI: India's Tata Motors announced its sixth straight quarter of losses Wednesday as inflation, Covid lockdowns in China and chip shortages hurt sales volumes at British subsidiary Jaguar Land Rover (JLR).

Net losses for the Mumbai-headquartered automaker widened to 50.07 billion rupees ($626.6 million) in the June quarter, compared to a loss of 44.51 billion rupees in the same period last year.

Revenue from operations rose 8.3 percent year-on-year to 719.35 billion rupees with a post-pandemic demand bounce, even as sales at JLR fell 11.3 percent to £4.41 billion ($5.32 billion), reports AFP.

Continued shortages of semiconductor chips -- a key component in car manufacturing -- in addition to Covid-19 lockdowns in China and rising raw material costs hurt JLR sales, the company said.

JLR chief Thierry Bollore said the firm had reinforced its organisational setup to respond to those headwinds.

"This is now starting to recover production growth to achieve greater volumes and will allow us to take advantage of our record order book," Bollore said in a statement.

Orders at JLR, Britain's biggest carmaker, rose to 200,000 in the quarter.

Revenue from Tata Motors' commercial vehicle business jumped 107.2 percent year-on-year to 162.70 billion rupees, as India bounced back from a 2021 pandemic sales dent.

But commercial vehicle exports fell 22.6 percent in the quarter, the company said, due to weak demand in some overseas markets.

Demand for passenger vehicles remained strong, with revenues up 122.5 percent on-year to 115.56 billion rupees.

The company said it sold 9,300 electric vehicles in the quarter, four times as many as in the same quarter last year.

"We expect demand to remain strong despite worries on inflation and geo-political risks while the supply situation is expected to improve further," the automaker said in a statement filed to stock exchanges.