Ralf Speth, JLR's chief executive, said: "Jaguar Land Rover reported strong third-quarter sales in the United Kingdom and North America but our overall performance continued to be impacted by challenging market conditions in China". The staggering loss comes even as its domestic business seems to have achieved a turnaround, with standalone profits almost tripling from Rs 211.59 crore for the same period of previous year to Rs 617.62 crore. China JV revenues stood at GBP 348 million, less than half of GBP 768 million, it had reported in the year ago quarter. Total standalone income rose to Rs 16,477.07 crore as against Rs 16,186.15 crore in the same period of previous fiscal.
Tata acquired JLR for £1.15 billion way back in 2008.
Commenting on the results, N Chandrasekaran, Chairman Tata Motors said, "Domestic business continues the strong momentum and has delivered market share gains as well as profitable growth".
For JLR, the diesel weakness comes as it struggles with slowing demand in China, where it has also suffered from competitors' pressure on its relationships with dealers.
Overall outlook for the company remains subdued.
"The economic slowdown in China continues to impact consumer confidence but, as part of our turnaround plan, we are working extensively with our retailers to rejuvenate sales. The company intends to improve mix and dealer profitability by increasing sales of models with high profitability and terminating underperforming dealerships", noted Vivek Kumar of JM Financial Institutional Securities.
Plummeting sales in China are compounding Jaguar Land Rover's challenges that include the industry's shift away from vehicles powered by gasoline and diesel - a stronghold for the company. "Our aspirations for the future will only grow to surpass customers' expectations", Guenter Butschek, CEO and MD, Tata Motors, said.
Sales for the quarter were £6.2bn, down from £6.3bn a year earlier. "We would get constructive on JLR only when volumes stabilize in China and Brexit concerns are behind us", it said. The brokerage downgraded the stock to "Neutral", with a target price of Rs 166. Despite the cost-reduction efforts, free cash flows are expected to remain negative over FY19-21, due to the large capex requirements of JLR. Its heavy production presence in the United Kingdom exposes it to a disorderly Brexit, the likelihood of which has risen over the past few weeks, Fitch Ratings said this week. On NSE, the shares settled at Rs 150.15, down 17.88 percent.