We tried to control the damage by block closures and other measures. However, the impact was sudden and severe, said Ravi Kant, managing director, Tata Motors. Hopefully, the worst is over, and Q4 is expected to be far superior than Q3, he added. The loss also includes a notional exchange rate loss of Rs 226.52 crore in the quarter.
Total income for the quarter dropped by $34.4 and stood at Rs 4,758.62 crore compared to Rs 7,251.83 crore a year ago. Rival Maruti Suzuki too had reported a decline in profits to Rs 213.57 crore for Q3 09 from Rs 467.04 crore in Q3 08.
Tata Motors shares were down marginally on the BSE on Friday at Rs 149.65. The disappointing results came in after market hours.
In the September quarter (Q2 09), Tata Motors had reported a 34% fall in net profit to Rs 346.99 crore from Rs 526.84 crore. The company then said the crunch in vehicle financing and high interest rates had pulled down its sales. The quarter was also impacted by high input costs and overall global financial market condition.
Though the company expects its commercial vehicles segment to do better from the recent government steps and availability of finance, the economic slowdown continues to dampen the sentiments. During the quarter, the automotive sector in India suffered a severe contraction in demand, arising from major financial and other market upheavals, the company said.
Sales volumes, including exports, for the quarter declined by 32% to 98,760 units. Medium and heavy commercial vehicle demand fell 61%. Tata Motors sales volume for the quarter (including exports) at 98,760 vehicles declined by 31.7% over 144,608 in the corresponding quarter last year.
The company, however, improved its market share in most segments, more particularly in commercial vehicles. Passenger cars and utility vehicles sales stood at 40,548 units during the quarter against 50,348 units in Q3 08, a fall of 19%.
JLR, owned by Tata Motors, was also affected during the quarter with an overall drop of 35%. However, stand-alone Jaguar volumes saw an increase to 1,72,758 units from 1,34,685 units last year. Talking about the refinancing for JLR, the company said it is in discussions with various banks to raise $2 billion, part of the total bridge loan of $3 billion. The company has already paid back $1 billion.
The company will cut costs by Rs 1,000 crore over the next three years while it will also reduce its capex by around Rs 700 to Rs 800 crore of the Rs 10,000-crore plan announced earlier. The lack of liquidity in the UK market is not still looked at, said Kant, That is the short-term need of the industry and the UK government should look into this, he added. The company also said that the work of shifting its small car plant from Singur in West Bengal to Sanand in Gujarat will take a year or so due to the complexities involved.