Amid Chip Shortage, Tata Motors Posts Rs 1,451 Crore Net Loss In Q3; Total Sales In January 2022 Is Up 27 Per Cent

India’s auto major Tata Motors on 31 January announced a total net loss of Rs 1,451.05 crore for the third quarter ending 31 December 2021.

But it noted a 27 per cent year-on-year growth in total vehicle sales in January 2022.

The performance in the October-December quarter was hampered by persistent semiconductor shortage, which resulted in lower sales for Jaguar Land Rover (JLR), as well as commodity inflation, which ate into the margins.

In the same quarter the previous year, the company made a net profit of Rs 2,941 crore. Tata Motors said in an exchange filing that its consolidated income from operations in the third quarter was Rs 72,229 crore, down from Rs 75,653 crore in the previous quarter.

JLR reported a pre-tax loss of nine million pounds in the third quarter, with revenue down 21.1 per cent to 4.7 billion pounds. JLR's sales are still being hampered by chip shortages, with retail sales of 80,126 vehicles, down 37.6 per cent from the third quarter of fiscal year (FY) 2021.

P B Balaji, Tata Motors' chief financial officer, said in an earnings presentation that the demand remains strong despite near-term concerns about the Omicron spread, adding that while the semiconductor supply situation is gradually improving, inflation concerns remain.

“Business is getting intrinsically resilient and therefore we could start turning strong performance once volumes start coming through. With concerted actions in place to address the near-term supply and cost challenges, we expect performance to improve further in Q4 FY22 and beyond,” he added.

Despite supply problems, volumes across all segments increased strongly in the third quarter FY 21, with overall market share improvements in both commercial and passenger vehicles, according to the company.

Tata Motors executive director Girish Wagh said: "The auto industry continued to witness rising demand in most segments even as the supply of semiconductors remained restricted resulting in adverse impact on production.”

He credited Tata Motors' agility in both planning and execution to help the company deliver another good quarter with faster sales while adding that the company has recorded the “highest ever EV sales during the quarter and sold 10,000 EVs in the nine months of FY22, crossing new milestones." "EV" is short for electric vehicles.

However, Tata Motors announced on 1 February that total vehicle sales, including international markets, increased by 27 per cent year on year to 76,210 units in January 2022. It also reported that total sales in January 2021 were 59,866 automobiles.

Additionally, the total domestic sales increased by 26 per cent to 72,485 units in January 2022, compared to 57,649 vehicles sold in the same month the previous year.

Similarly, total passenger vehicle sales increased to 40,777 units last month, up from 26,978 units in January 2021, and electric vehicle sales increased nearly fivefold to 2,892 vehicles, up from 514 units sold a year ago.

In January 2022, total commercial vehicle sales reached 35,268 units, up 7 per cent from the 32,816 units sold in the same month the previous year. This comprised 31,798 units sold in the domestic market, up 3 per cent from 30,671 units sold in January 2021, according to Tata Motors.

It also reported that the total medium and heavy commercial vehicle sales in January 2022, comprising trucks, buses, and overseas operations, were 10,655 units, up from 9,452 units in January 2021.