JLR to undergo Project Charge turnaround plan; Tata reports Q2 loss
Jaguar Land Rover — hit hard by trade tensions between China and the U.S., low demand for diesel vehicles in Europe and worries over Brexit — will undergo a turnaround plan, Tata Motors said Wednesday as it reported a loss in the second quarter.
Under "Project Charge," Tata Motors said it plans to cut costs and improve cash flows at Jaguar Land Rover by 2.5 billion pounds ($3.2 billion) over 18 months.
JLR also plans to launch several new vehicles including the Jaguar I-Pace, which hits U.S. showrooms next month, and the new Land Rover Defender, due in 2020, over the next few years and will offer a hybrid or electric version of all its models by 2020.
"Together with our ongoing product offensive and calibrated investment plans, these efforts will lay the foundations for long-term sustainable growth," JLR CEO Ralf Speth said after Tata Motors reported a loss for the second quarter.
JLR has trimmed its pretax profit expectations for the current fiscal year ending March 31, 2019, and expects to break even, Speth said, vs. an earlier target of profit growth.
As part of the turnaround plan, JLR will first focus on cash saving "quick wins" such as reducing nonproduct investments and speeding asset sales, Tata said in an investor presentation.
In the near term it will improve efficiency in areas including purchasing and material cost, manufacturing and logistics, and people and will focus on strategic and noncore asset sales. JLR has reduced the number of production days at its U.K. plants in Castle Bromwich and Solihull.
The company said in its presentation it has saved $382.8 million since it initiated the turnaround plan six weeks ago and is working on 500 ideas for the future.
Q2 earnings report
Tata Motors lost 10.49 billion rupees ($141.8 million), compared with a profit of $335.7 million in the year-ago period, the company said.
That was worse than the estimate of a loss of $32.4 million, according to Refinitiv data.
Total expenses during July-September rose 8.6 percent, while revenue climbed to $9.64 billion from $9.41 billion rupees a year earlier.
The automaker incurred a one-off charge of $59 million attributed to the closure of operations at its Thailand-based subsidiary.