Jaguar parent group slumps to £267m loss

Jun 27 2009 Huddersfield Daily Examiner

THE Indian owner of Jaguar Land Rover slumped to losses of £267m in the year to March 31 as the global downturn hit the car industry.

The losses at Tata Motors, which bought the company from Ford for £1.5bn in June last year, compare with a £388m profit the previous year.

Tata has cut about 2,000 staff at Jaguar Land Rover so far, leaving it with 15,000 workers, but hinted at further cost-cutting moves to come.

JLR was profitable in the first half of the year before succumbing to the downturn, with Tata’s accounts showing losses of £224m at the business.

“The global meltdown, especially after July, 2008, with vehicle financing and demands drying up, impacted on the auto industry worldwide, including Jaguar Land Rover,” the firm said.

Tata said Land Rover sales “fell considerably” during 2008, although Jaguar was able to maintain sales after a “very strong consumer response” to the newly launched XF sedan.

Tata said it was taking a “number of urgent and long term measures” to stem losses at the business – including cutting costs “drastically” and aligning production with demand.

The company has also introduced new variants on both Jaguar and Land Rover brands and will unveil the new XJ sedan shortly.

Workers at the company’s sites, including ones in the West Midlands and Merseyside, agreed to a one-year pay freeze and shorter working week in March in order to cut costs.

In April, Tata received agreement for a £340m loan from the European Investment Bank. It is now in talks with the Government over the terms for guaranteeing this loan, as well as other financial support.

A spokeswoman for the Department for Business said: “The Government is willing to help as it regards JLR as a viable company with good long term prospects.”