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Tata Motors in the red over chip shortages

INDIA's Tata Motors, the owners of the Jaguar and Land Rover brands, reported a fourth consecutive quarterly loss, weighed down by higher commodity prices and the global chip shortage.

Microchips are a key component in car manufacturing but automakers around the world have been hamstrung by limited supplies due to semiconductor production cuts during the pandemic.


The Mumbai-headquartered firm reported a net loss of Rs 15.2 billion ($203 million) in the three months to December 31, it said in a statement, compared to a net profit of Rs 29.1bn ($390m) a year earlier.

"The auto industry continued to witness rising demand in most segments even as the supply of semiconductors remained restricted resulting in adverse impact on production," Tata Motors' executive director Girish Wagh said in a statement.

"The semiconductor supply situation is improving gradually whilst inflation worries persist," the company added.

Operational revenue slipped 4.5 per cent to Rs 722.3bn ($9.7bn) from a year earlier.

Retail sales for Tata Motors' British subsidiary, Britain's biggest carmaker Jaguar Land Rover, were "significantly constrained by chip shortages and low inventories" and fell 37.6 per cent year-on-year.

But the company's India business saw revenue rise by 43.3 per cent on the corresponding period, with sales up across all vehicle segments.

Its electric-vehicle arm reported a new quarterly sales high of 5,592 cars.

Shares in Tata Motors closed 4.04 per cent higher at the end of Monday's trade in Mumbai ahead of the earnings announcement.

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Rachel Reeves

Reeves has said repeatedly that she is committed to 'economic responsibility' and will maintain her fiscal rules, including her main goal of balancing day-to-day public spending with tax revenues by 2030. (Photo: Getty Images)

Reeves says both tax and spending options on table for budget

Highlights

  • Reeves says both tax rises and spending cuts are being considered for the Nov 26 budget
  • Economic analysts estimate a potential £30 billion gap to be filled through tax measures
  • Government borrowing costs have risen and welfare spending cuts have been dropped
  • Growth forecasts are expected to be revised downwards

CHANCELLOR Rachel Reeves has said she is looking at both tax increases and spending cuts for the upcoming budget on November 26, confirming expectations that she will take steps to balance the country’s finances.

Economic analysts estimate that Reeves may need to raise about £30 billion through tax measures, after government borrowing costs rose more than anticipated and plans to reduce welfare spending were dropped. Growth forecasts are also expected to be revised downward.

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