According to multiple reports over the weekend and today, Jaguar Land Rover have been hemorrhaging money lately, to the extent that they’re in danger of pulling Tata Motors down with them.
Jaguar Land Rover seemed to be doing fine, until Q3 of 2018, when they posted a loss of $113 million. This resulted in an announced 4,500 job cuts, and plans for $3.15 billion in cost savings.
That was then. More recently, Jaguar Land Rover have posted the results for Q4 2018, which, simply put, amount to oceans of red ink. Jaguar Land Rover lost a staggering £3.4 billion ($4.4 billion in current exchange rates) in a single quarter. To put that into perspective, Tata only paid $2.3 billion for JRL back in June of 2008.
As a result of this, Tata Motors posted a loss of $3.78 billion for their Q3 2018, which ended in December. This was India’s biggest corporate loss ever, and resulted in Moody’s, S&P, and Fitch all putting Tata Motors’ credit rating on a “negative watch”.
According to statements by Dr. Ralf Speth, Jaguar Land Rover’s CEO, the losses are due to declining sales of diesel cars, slumping sales in China, and uncertainty created by the prospects of a no-deal Brexit. The latter threatens the carmakers entire operational setup, according to Dr. Speth, and forces Tata Motors to reconsider their financing options.
Or, as the Washington Post put it, The Wheels Have Come Off at Jaguar Land Rover.