JLR to suspend production at Nitra site from Friday on virus concerns

Luxury automaker Jaguar Land Rover said it will suspend production temporarily at its Slovakia-based Nitra plant from Friday due to the coronavirus pandemic.

However, the company, which is owned by India's Tata Motors, said late on Tuesday that some limited activities will continue on the Nitra site.

Tata Motors' Jaguar Land Rover shelves plan to sell bonds to raise cash

Jaguar Land Rover Automotive Plc has shelved plans to issue a US dollar bond after investors demanded too high an interest rate to compensate for the risk the coronavirus poses to the luxury carmaker, according to people familiar with the matter.

Jaguar hired Bank of America Merrill Lynch to meet investors in the US last week ahead of a potential sale of new bonds, and days after warning the deadly virus outbreak was impacting its supply chain. The company gained enough interest to prepare an eight-year bond in the high 7 per cent yield range, according to the people who asked not to be named because they’re not authorized to speak publicly.

But news this week that the company could start to run out of Chinese parts for its UK factories in about two weeks, and that it may never recoup the sales lost to the virus, has scuppered its chances of issuing debt at acceptable levels. Jaguar, a unit of India’s Tata Motors Ltd., gets about 20 per cent of its sales from China.

A spokeswoman for Jaguar told Bloomberg News that the meetings with US investors were planned as a roadshow to “lay the groundwork” for a future transaction.

The company “routinely monitors the debt capital markets so could decide to issue a new bond anytime it thinks conditions are favorable,” she added.

Officials at BAML declined to comment on the potential deal.

Maturing Bonds

The maker of the Land Rover Discovery SUV is scheduled to repay the equivalent of about $1.2 billion of maturing bonds over the next two years, including a $500 million note due in March 2020.

The company is not facing any near term pressures to raise new funding and has around $6 billion of liquidity to help tackle any near term maturities.

Read more: Jaguar Land Rover Unsure It’ll Recoup China Sales Lost to Virus

Jaguar returned to the bond market for the first time in almost a year in November, selling 800 million euros ($864 million) of debt following a positive set of results. It took advantage of investor optimism around the company at the time and raised an additional 200 million euros just a month later.

Tata seeks partners for JLR; approaches BMW, Chinese automaker Geely

Tata Group, the owner of Jaguar Land Rover, has approached carmakers including China’s Zhejiang Geely Holding Group Co. and BMW AG as it seeks partnerships for the beleaguered British automotive business, people with knowledge of the matter said.

India’s largest conglomerate has said it’s open to finding partners for JLR to save on costs and share the burden of investing in electric vehicles. The deliberations were at an early stage and Tata could still approach other potential partners, the people said, asking not to be identified because the information is private. It wasn’t immediately clear how receptive Geely and BMW were.

“There have been no talks with Tata or JLR,” Geely said in a statement. BMW declined to comment, as did Tata.

Any tie-up with a Chinese automaker could potentially help JLR in that market, where its struggles led to a $3.9 billion writedown earlier this year. Deeper ties between the British luxury brand and BMW would build on an existing collaboration to develop engines and electric-drive technology, though the German carmaker’s former chief executive officer in August ruled out any equity investment.

Scale has become increasingly crucial in the automotive industry as carmakers pool resources to tackle electrification and autonomous driving. The challenge is especially daunting for smaller players such as JLR, which has committed to an ambitious program to offer electric variants for each of its new models from 2020. The British carmaker was an early mover among incumbent manufacturers with the electric I-Pace crossover, introduced last year.

A global downturn that’s hit major markets has added to the pressure, and despite the many challenges of turning fierce rivals into collaborators, the pace of dealmaking has picked up.

Volkswagen AG, the world’s largest carmaker, this year agreed to team with Ford Motor Co. in areas including electrification and self-driving cars. PSA Group — the French owner of Peugeot, Opel and Citroen — last month agreed to combine with Fiat Chrysler Automobiles NV to create the world’s fourth-largest automaker by volume.

JLR Turnaround

One potential obstacle for any partner with JLR is the British automaker’s financial struggles. Tata has begun to address some of these issues, providing the brand with a $910 million equity infusion to help bolster its balance sheet.

In China, JLR has struggled with quality and dealership issues. The company reported last month that sales had stabilized, helping parent Tata Motors Ltd. post a narrower-than-projected quarterly loss. The British unit is also near completion of a 2.5 billion-pound ($3.2 billion) savings drive that included thousands of job cuts worldwide.

Tata Group bought the maker of the Jaguar XE sedan and the Land Rover Discovery sport-utility vehicle in 2008 for $2.3 billion. While the conglomerate is open to finding partners for JLR, it doesn’t plan on selling the unit, N. Chandrasekaran, chairman of group holding company, Tata Sons Ltd., said in an interview last month.

Tata won't sell Jaguar Land Rover, open to adding partners: Chandrasekaran

The Indian conglomerate that owns Jaguar Land Rover said it is open to finding partners for the automaker but isn’t planning on selling the embattled unit.

“We’re not going to sell,” said Natarajan Chandrasekaran, chairman of Tata Sons Ltd., the holding company in an expansive business empire that includes Tata Motors Ltd. “Auto is a core business for us. From revenue terms, auto is our largest company.”

Tata Motors bought the maker of the Jaguar XE sedan and Land Rover Discovery sport utility vehicle from Ford Motor Co. in 2008. After turning it into a cash cow with booming sales in countries like Russia and China, JLR waned to such an extent that it’s had to launch a 2.5 billion-pound ($3.2 billion) savings program and slash thousands of jobs worldwide.

Losses at Tata’s automotive business have mounted with a slump in India’s car market, as well as trouble overseas, including an economic slowdown in China, where auto sales are sliding, and uncertainty over Brexit. JLR is closing its U.K. factories for a week in November to guard against disruption to supply chains from a possible no-deal Brexit.

Chandrasekaran said China sales have “collapsed” with a 50 per cent drop last year, though 2019 is showing some improvement. Some problems were self-inflicted, including vehicle quality and dealer issues, he said, noting that the auto industry is “going through difficult times.”

“Getting the right portfolio, which one we invest in for electric vehicles, and how do we cut cost” are issues that need to be resolved, he said.

In an interview with Bloomberg Television earlier Tuesday, Chandrasekaran said dealing with tariffs is the “new normal” for the global auto industry and that negotiations around Britain’s exit from the European Union have taken too long. “Sometimes it’s better to have clarity than a desirable result,” he said. “Nations are getting more protective.”

The troubles of JLR are bogging down the Tata group as a whole, with Tata Motors writing down its investment in the British brands earlier this year by $3.9 billion. The salt-to-software conglomerate is among India’s most indebted, and the slump in the auto market is hitting both Tata Motors and Tata Steel, the nation’s biggest maker of the alloy.

Analysts at Sanford C Bernstein last month described JLR as “severely challenged” and said Tata Motors should look at BMW AG as a buyer because the German company is “awash with cash.” Tata has previously denied reports it is looking at strategic options for JLR, including a possible stake sale.

While the company would “always look for partnerships,” it doesn’t want deals where “we just sell a stake and we have no say,” Chandrasekaran said Tuesday in New York. “We are not financial investors, Tata Group, we run companies. I’m not a Blackstone, I’m not a KKR.”

JLR’s capital expenditure has outpaced operating cash flow over the past two years, but Chandrasekaran said his target is to reverse that trend by 2021. “Once we do that, then people will believe what I’m saying: I’m not running away.”

Jaguar wants to accelerate growth as it completes 10 years in India

Completing 10 years of operations in India, Tata Motors-owned Completing 10 years of operations in India, Tata Motors-owned Jaguar Land Rover is looking to accelerate its business in the country, building on the foundation laid in the last one decade, a top company official said Friday.

The company, which assembles six out of the 11 models that it sells in India, is open to more local manufacturing depending on the market growth of the luxury vehicles here in the country.

"The brands (both Jaguar and Land Rover) are strongly established in India now. That is helping us in making it aspirational brands. It has helped us in our journey in a big way," Jaguar Land Rover India President and Managing Director Rohit Suri told PTI.

Reiterating the company's strong performance, he claimed,"One out of every four luxury SUVs sold (in the segments JLR is present) in India is ours."

With over seven million followers on various social media platforms, he said JLR has been successful in connecting with a large population of people who aspire to own the brand one day.

Suri further said,"We started with almost 200 cars in the first year in 2009-10. We are in the range of almost 4,000 odd cars (annually) now, which in itself is quite an achievement."

When asked about the outlook for future and the next milestone target, he said,"We would like to double the pace but it can only happen when the overall market grows and the segment size grows."

JLR's product portfolio in India ranges from the Jaguar XE sedan with starting price of Rs 40.61 lakh and going all the way up to the Range Rover priced at Rs 1.82 crore onwards.

Currently, it is locally manufacturing six vehicles at its facility in Pune. These are Jaguar XE, Jaguar XF, Jaguar F-PACE under the Jaguar portfolio and the Range Rover Evoque, Range Rover Velar and Discovery Sport under the Land Rover portfolio.

Asked if the company would consider increasing the number of locally manufactured models, Suri said,"This can grow provided the market grows. We are not assembling the higher-end models as volumes don't justify local manufacturing. We will be keenly looking forward to government support to expand this segment."

To mark the completion of 10 years of operations in India, Suri said JLR has loaned a specially prepared Land Rover Discovery Sport to Rapid Response, an NGO that specialises in disaster management and relief, for disaster related relief work across India.

He said Land Rover vehicles, such as Discovery Sport, are renowned for their capability in tackling difficult terrains and situations caused by floods and other such catastrophic events and it will help Rapid Response in their efforts to help victims of such natural calamities in India.

 is looking to accelerate its business in the country, building on the foundation laid in the last one decade, a top company official said Friday.

The company, which assembles six out of the 11 models that it sells in India, is open to more local manufacturing depending on the market growth of the luxury vehicles here in the country.

"The brands (both Jaguar and Land Rover) are strongly established in India now. That is helping us in making it aspirational brands. It has helped us in our journey in a big way," Jaguar Land Rover India President and Managing Director Rohit Suri told PTI.

Reiterating the company's strong performance, he claimed,"One out of every four luxury SUVs sold (in the segments JLR is present) in India is ours."

With over seven million followers on various social media platforms, he said JLR has been successful in connecting with a large population of people who aspire to own the brand one day.

Suri further said,"We started with almost 200 cars in the first year in 2009-10. We are in the range of almost 4,000 odd cars (annually) now, which in itself is quite an achievement."

When asked about the outlook for future and the next milestone target, he said,"We would like to double the pace but it can only happen when the overall market grows and the segment size grows."

JLR's product portfolio in India ranges from the Jaguar XE sedan with starting price of Rs 40.61 lakh and going all the way up to the Range Rover priced at Rs 1.82 crore onwards.

Currently, it is locally manufacturing six vehicles at its facility in Pune. These are Jaguar XE, Jaguar XF, Jaguar F-PACE under the Jaguar portfolio and the Range Rover Evoque, Range Rover Velar and Discovery Sport under the Land Rover portfolio.

Asked if the company would consider increasing the number of locally manufactured models, Suri said,"This can grow provided the market grows. We are not assembling the higher-end models as volumes don't justify local manufacturing. We will be keenly looking forward to government support to expand this segment."

To mark the completion of 10 years of operations in India, Suri said JLR has loaned a specially prepared Land Rover Discovery Sport to Rapid Response, an NGO that specialises in disaster management and relief, for disaster related relief work across India.

He said Land Rover vehicles, such as Discovery Sport, are renowned for their capability in tackling difficult terrains and situations caused by floods and other such catastrophic events and it will help Rapid Response in their efforts to help victims of such natural calamities in India.