Jaguar Land Rover will take profit hit due to coronavirus

[Mark-x]

Tata Motors warned of lower profit at its Jaguar Land Rover unit for the fiscal year because sales in China have taken a hit during the coronavirus outbreak.

The virus epidemic has hit JLR's retail sales in China and is expected to lower the automaker's full year EBIT (earnings before interest and tax) margin, Tata Motors said in a statement.

"Recognizing the present situation is highly uncertain and could change, the reduction in China sales resulting from the coronavirus presently is estimated to reduce Jaguar Land Rover's full year EBIT margin by about 1 percent," Tata said.

 

China is also a major hub for vehicle parts production and a prolonged shutdown at plants has disrupted auto supply chains affecting carmakers in all parts of the world.

"Suppliers in China are resuming operations but remain below full capacity," Tata said, adding that JLR has managed to avoid potential parts shortages by working closely with its suppliers and with some increased use of air freight.

 

JLR has been flying Chinese parts in suitcases as well to Britain to maintain production.Tata Motors warned in January the coronavirus could impact its profit margin forecast of around 3 percent for the JLR unit for the fiscal year 2020 at a time when it was making progress on a turnaround plan to improve sales in China.