Jaguar Land Rover, a British-based manufacturer owned by Indian automaker Tata Motors, announced this week that the brand will make the shift to electric vehicles starting in 2025. Photo: Handout

Auto major Tata Motors reported a surprise loss in the fourth quarter on the back of write-offs related to its subsidiary Jaguar Land Rover, a global chip shortage and other supply-related challenges.

The auto unit of salt-to-software Tata Group incurred a consolidated net loss of 76.05 billion rupees (US$1.04 billion) for the quarter ended March 31. However, this is lower than a loss of 98.94 billion rupees in the year-ago quarter.

The cash writedowns related to Jaguar Land Rover were on assets worth 96.06 billion rupees ($1.32 billion). This is apart from the restructuring costs of 53.88 billion rupees. The exceptional loss related to Jaguar Land Rover in this quarter stood at nearly $2 billion.

The carmaker’s revenue from operations for this quarter was 886.28 billion rupees ($12.13 billion), up 42% from the revenue of 624.92 billion rupees in the same quarter last year. Its India business reported a 106% year-on-year jump in revenue to 200.46 billion rupees in the March quarter. Sales at Jaguar Land Rover also surged 20.5% to 6.5 billion pounds sterling, or $9.2 billion.

On a standalone basis, Tata Motors reported a net profit of 16.46 billion rupees against a loss of 48.71 billion rupees in the year-ago period.

Automakers across the world have been forced to cut down production due to the chip crunch in the market. The Covid-19 crisis and a surge in demand for laptops and other gadgets for remote work and online classes have forced chipmakers to prioritize this segment.

“While demand remains strong, the supply situation over the next few months is likely to be adversely impacted,” Tata Motors said in a stock exchange filing. It expects the April-June quarter to be weak and improve gradually in the next quarter.

Tata Motors CEO and MD Guenter Butschek said: “Commercial vehicles business consistently posted sequential quarter-on-quarter growth on the back of improved consumer sentiments, buoyancy in e-business, firming freight rates and higher infrastructure demand including road construction and mining. We have successfully improved our operational and financial performance by reducing costs.”