Tata Motors shocked investors by reporting about $4 billion in losses last quarter, and you can blame it all on Jaguar Land Rover. The result has been Tata share prices plummeting by up to 30 percent at one point, meaning it’s a great time to buy a bunch of stock in the company.
To be honest, blaming Jaguar Land Rover for the loss is actually pretty accurate, and for good reason. The vast majority of Tata’s revenue comes from the British automaker, so as Jaguar Land Rover rises and falls, so does Tata.
The big stumbling block has been the Chinese market. If you aren’t keeping up with what’s going on there, basically it’s like a dumpster fire and kids are throwing fireworks into the flames to see what happens. It’s so bad, Jaguar Land Rover saw sales in December drop to almost half of what it was the previous December.
Not since the 1990s have we seen Chinese car sales shrink so much, and it should be a warning to everyone who said China would always be a vibrant market.
Back to Jaguar Land Rover, apparently the company is looking to cut costs, boost cash flows, and create more competitive products for the future. Hopefully that includes manufacturing vehicles that don’t fall apart, but there’s a tradition to uphold, so maybe not.