The Indian owner of Jaguar Land Rover today said it slumped to losses of £267m (€312m) in the year to March 31 as the global downturn punishes the car industry.
The losses at Tata Motors, which bought the company from Ford for $2.5bn (€1.77bn) in June last year, compared with a £388m (€454m) profit the previous year.
Tata has cut around 2,000 staff at Jaguar Land Rover so far leaving it with 15,000 workers, but hinted at further cost-cutting moves to come.
JLR was profitable in the first half of the year before succumbing to the downturn, with Tata’s accounts showing losses of £224m (€210m) at the business.
“The global meltdown, especially after July 2008 with vehicle financing and demands drying up, impacted the auto industry worldwide, including Jaguar Land Rover,” the firm said.
Tata said Land Rover sales “fell considerably” during 2008, although Jaguar was able to maintain sales after a “very strong consumer response” to the newly launched XF sedan.
Tata said it was taking a “number of urgent and long term measures” to stem losses at the business.
“These include cutting costs drastically and working on a plan of substantial cost reduction, aligning production with demand and tight control over cash flows.”
It has also introduced new variants on both Jaguar and Land Rover brands, and will unveil the new XJ sedan shortly.
Workers at the company’s sites, including Castle Bromwich and Solihull in the West Midlands and Halewood on Merseyside, agreed to a one-year pay freeze and shorter working week in March in order to cut costs.
In April Tata received agreement for a £340m (€397m) loan from the European Investment Bank but is currently in talks with the British government over the terms for guaranteeing this loan, as well as other financial support for the group.
A spokeswoman for the Department for Business, Innovation & Skills said: “The government has said that it is willing to help as it regards JLR as a viable company with good long term prospects. We recognise that trading conditions for the car industry are difficult at the moment.
“Talks are progressing with JLR and Tata over terms and arrangements of both the short and long term financing of JLR.”