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Tata Motors shares fluctuate amidst growing concerns with JLR

Tata Motors shares fluctuate amidst growing concerns with JLR

Tata Motors shares fluctuate amidst growing concerns with JLR
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By Nishtha Pandey  Nov 18, 2022 11:55:12 AM IST (Updated)

In the UK too the sales have been under stress. In the second quarter for FY23 JLR sales in the UK were the lowest since Q1FY23. Wholesale sales in the UK for the July-September quarter stood at 11983 units, down 26 percent from 16243 units in the previous quarter.

Shares of Tata Motors slid down on early morning trade but managed to gain back the momentum to trade flat amidst JLR uncertainty. At 11:30 am, at the time of publishing, shares of the motor giant are trading at Rs 424 per share, up 0.3 percent from the previous close on the BSE. The automaker has bagged an order for 1,000 buses from Haryana Roadways and this announcement seems to have perked up the scrip.

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The early morning slip by 0.4 percent indicated a fluctuating trend amidst growing concerns with the Tata-owned operations of Jaguar Land Rover (JLR).
UK Chancellor Jeremy Hunt yesterday announced that electric vehicles will no longer be exempt from vehicle excise duty from April 2025. Now, this holds importance for Tata Motors because its wholly owned subsidiary JLR gets 20 percent of its volume from the UK and this decision can further reduce the incentive to switch to electric vehicles in the UK, thus impacting JLR sales.
JLR under stress
JLR sales have already been in stress. The company lowered the financial guidance for the year after poor Q2 performance resulting from the shortage of specialised semiconductors.
In the earnings call last week, Tata Motors said JLR fell short of its sales target of 90,000 units due to the chip shortage – the luxury carmaker managed to sell only 75,000 units during the July-September quarter.
In the UK too the sales have been under stress. In the second quarter for FY23 JLR sales in the UK were the lowest since Q1FY23. Wholesale sales in the UK for the July-September quarter stood at 11983 units, down 26 percent from 16243 units in the previous quarter.
On an overall perspective, according to Bloomberg data, JLR has posted losses for seven straight quarters, most recently declaring a loss before tax of £173 million ($206 million) for the three months ended in September.
This week amidst growing concerns, Thierry Bolloré, the CEO of JLR, tendered his resignation due to personal reasons. Shares of Tata Motors have gained over 5 percent in one month and have declined over 14 percent in the year so far
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