The Hindu Business Line : JLR breathes a lot easier though tough times continue

Mumbai, Aug 11 “We are hopeful of soon being able to access the approved £340-million European Investment Bank (EIB) loan in support of our future product and environmental technology development,” said Mr David Smith, CEO of Jaguar Land Rover, in a statement here.

In fact, JLR has embarked on emission reduction technologies and the initial development in this regard, as reflected on the start-stop technology adopted on the Freelander.

“The project concerns the financing of the promoter’s activities related to the reduction of CO{-2} emissions of its cars. The Bank’s support would be focused on the development of those powertrains that are designed to meet the CO{-2} emission targets set by the EU Commission, notably the development of downsized diesel engines and downsized drivetrains. The promoter will carry out the work in its existing R&D centres in the UK,” said the EIB Web site.

The spokespersons of Tata Motors and Jaguar Land Rover refused to disclose the names of the commercial banks that had guaranteed the EIB loan. The Tata official also declined to comment on an agency report citing £175-million private funding to JLR. “I am afraid I can’t confirm it,” said Mr Don Hume, Director, Corporate and Government Affairs, JLR.

Tata Motors bought the two British brands for $2.5 billion from Ford Motor Company in March 2008. It then spent $1 billion more to meet JLR’s working capital requirements. However, things got difficult with the global economic slowdown. The combined annual sales of JLR fell 32 per cent to 1.67 lakh units in 2008-09. While Land Rover numbers were down to 1.2 lakh units from 1.98 lakh units, Jaguar sold 47,000 units, 1,000 cars fewer than last year. The JLR business reported a loss of Rs 1,777 crore last fiscal, which impacted Tata Motors’ bottomline.

Cost-cutting

The British automaker has been doing its bit through cost-cutting measures, which include temporary plant shutdowns. “We have been forced to take unprecedented actions through this tough economic crisis and the environment is still very challenging. It will continue to be so for some time to come and we will continue to take further actions to secure the future of the business,” said Mr Smith.

Tata Motors, meanwhile, recently repaid $150 million of its $1-billion debt outstanding on account of the JLR acquisition from the proceeds of stake divestment in group companies. Jaguar and Land Rover models have made an India entry and are now housed in an exclusive showroom in Mumbai.

More Stories on : Outlook | Cars | Tata Motors Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page