In Jaguar Land Rover’s FY-20 annual report, Chandrasekaran asserted that the global automotive industry has witnessed the greatest set of challenges in its history led by Covid-19 crisis and other market headwinds.
“We will prioritise simplification, synergies and scale within the Tata Motors family, including working with partners when it makes sense to do so,” added the chairman, reiterating his intention of being open to partnerships.
Reinforcing the commitment to JLR, the chairman said Jaguar Land Rover remains a key pillar of the wider Tata Group.
“Tata Group recognises and values Jaguar Land Rover’s future potential highly. That is why this company is central to our global automotive presence – a presence that we intend to develop for years to come,” he added.
To be sure, there have been various speculative news reports about Tata Motors looking at selling stake in JLR, reports that have been negated earlier by the company. The chairman has even clarified on being open to ‘alliances and partnerships’, but not a ‘stake sale’.
Meanwhile, JLR chief executive Ralf Speth, who finishes his term at the company, said that sales were on a strong trajectory despite regulatory changes, shifting consumer tastes, Brexit, and the ongoing trade tensions. Operating performance was underpinned by the pro-forma GBP2.9 billion of cost and cash flow improvements achieved through the major transformation programme, Project Charge, by December 2019.
On the way ahead, Speth said JLR has reacted quickly and decisively to the pandemic, with an accelerated focus on improving cash flow and strengthening liquidity to pave the way for long-term EBIT margin improvement.
“Charge+, the next phase of our transformation programme, is already ahead of schedule, having achieved a pro-forma £600 million of savings in Q4 Fiscal 2019/20 against a new target of over £2 billion of cost improvements by March 2021,” added Speth.
The pandemic hit JLR’s cash flow by 800 million pounds last financial year. It has reduced the planned capex to 2.5 billion pounds from 4.5 billion pounds for this fiscal year, while also increasing the cost-saving target under an ongoing two-year programme to 5 billion pounds from 4 billion pounds.