Tata Motors eyes partnerships for Jaguar Land Rover

Tata Motors is looking to establish partnerships for its Jaguar Land Rover (JLR) subsidiary, in light of the British outfit’s volume slowdown and increasing losses. This was revealed by Natarajan Chandrasekaran, chairman of Tata Motors, at the company’s 74th annual general meeting, as reported by Financial Express.

According to JLR’s financial results for the three-month period ending June 30, 2019, the company recorded a year-on-year 11.6% decline in its global retail sales to 128,615 vehicles for the quarter. It also reported a pre-tax loss of 395 million British pounds, which was higher than the loss of 264 million British pounds loss in the same period last year, on quarterly revenues that declined 2.8% year-on-year to 5.07 billion British pounds.

Chandrasekaran described the automotive sector as both capital and investment intensive, especially to develop new products and technology. “The only way to handle the ongoing crisis and the continuing need for large capex (capital expenditure) is additional investment through partnerships, because we want to spread the investment, which cannot be shut either,” said Chandrasekaran.

“There are many discussions from tactical to strategic for such partnerships. Opportunities are coming and we keep evaluating them and as long as it is in the interest of Tata Motors. We will forge such partnerships so that we are able to address the capex issue,” he added.

The uncertainty that arises from the Brexit issue is also detrimental to JLR, as it affects the company’s ability to procure parts. “The real concern is if Brexit were to happen with or without a deal, what will be the impact on our supply chain. We import millions of components from other parts of the world, particularly Europe,” explained Chandrasekaran

In the situation of Brexit, there’s a possibility of a supply chain breakdown, which essentially means production cannot happen, inventories are to be maintained,” he continued. For now, Chandrasekaran stated the company has yet to narrow down any potential partners, but will continue meeting with multiple players, including in China, to find a suitable fit for JLR.

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