Tata Motors open to partnerships for Jaguar Land Rover

Strategic and tactical partnerships needed to meet JLR’s substantial capital expenditure requirements, says Tata Motors chairman.

Published On Jul 31, 2019 04:33:00 PM

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Speaking at Tata Motors’ 74th AGM, company chairman N Chandrasekaran divulged that the carmaker is open to partnerships for Jaguar Land Rover. “Like any other auto company, JLR has to invest in future technologies to address the move away from ICE to hybrid and electric. It also has to invest in future models, make necessary investments in areas like shared mobility, and also beyond that. That's very important to stay alive in this ecosystem. All this means is there is a need for capital investment if you want to be future-ready,” said Tata Motors’ chairman. "The only way to handle this need for capex is additional investment through partnerships, because we want to spread the investment. There are many discussions underway, from tactical to strategic."

Chandrasekaran disclosed that over the past 12-18 months, capex in JLR has been reduced from around £4.5 billion (Rs 34,483 crore) to £3.98 billion (Rs 30,499 crore) in the previous year. He also spoke of plans to make further reductions but assured there wouldn’t be any “drastic cut”.

Talking about potential partnerships, Chandrasekaran added “These opportunities keep coming and we keep evaluating every one of these opportunities 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.” This could mean the company could forge new connections with established automotive players globally or even with start-ups, something similar to what global automakers like Daimler and the BMW Group are doing. Only recently, PSA was said to be in talks with Tata Motors, something the Indian carmaker denied.

The latest development comes at a time when Jaguar Land Rover is weighing down heavy on owner Tata Motors’ numbers. Tata Motors has reported a Q1FY2020 net loss of Rs 3,680 crore, including a Rs 3,451 crore loss from the luxury arm, JLR. JLR sales have been affected by a shift in demand for petrols and a drastic drop in demand, to the tune of 40-50 percent, in China. However, sales in China did pick up in July 2019. “For the first time in 12 months, we are seeing a positive volume growth in China in July. Last month it recovered and this month it looks good. But we need to wait for a couple of more months to see whether there's a trend,” said Chandrasekaran.

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