Tata Motors Gets Lower Credit Rating Due To Jaguar Land Rover’s Weak Status

S&P Global Ratings has lowered the credit rating of Tata Motors, citing the weaker than expected profitability of Jaguar Land Rover, which is owned by the Indian car maker.

Both Jaguar and Land Rover suffer greatly from trade tensions between China and US, as well as decreasing demand for diesel vehicles in Europe and worries over Brexit, Reuters reports.

S&P cut Tata Motors credit rating to ‘BB-’ from ‘BB’, with the company’s rating remaining on negative watch due to the uncertainty caused by the imminent Brexit deal.

The British car makers’ increased presence in the UK leaves it exposed to the fallout of a potential no-deal Brexit, which could hinder the possibility of a turnaround, according to the rating company.

“JLR will have significant negative free operating cash flows over the next two years, resulting in weak financial ratios for Tata Motors,” said S&P in their statement.

They also added that they expect Tata Motors’ condition to worsen over the next 12 to 18 months, taking into consideration the ongoing cash losses at JLR.

Last October, Tata Motors posted a loss for the second quarter of 2018, but also revealed a new turnaround plan for JLR which included cutting costs and ways to improve cash flow over the next 18 months.

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  • Howfarr

    Well I guess they can’t exactly use the typical Indian trick of putting their successful 2nd cousin’s father in law’s brother on the application form

  • Christian

    Dear Car Scoop… Renault have introduced new Performance part for “ya Clio and Megane.. where’s the news… and TIP to the hat goes too?

  • Shobin Drogan

    Well, I honestly think Land Rover is now doing better than they ever have in the past. Jaguar on the other hand…

    • Howfarr

      Jaguar what? Has recently launched is 2 fastest selling cars in its history F-Pace and E-Pace, and launched a genuine rival to the model X the i-Pace?

      • Shobin Drogan

        At the same time, they made 0 improvements to their XF & XJ and made the incredibly mediocre XE that sold about 5 internationally.
        Fastest selling don’t mean better cars, F pace and E pace got mixed reviews to say the least.

        • Howfarr

          ‘Better cars’ than what?
          The competition, well generally if you’re outselling the competition it means you have a better product in some regard.
          or better than the XE XF XJ, well again if you’re outselling previous models it means the new ones are better in some regard

          • Shobin Drogan

            I’m extremely doubtful the F-pace & ipace has done any impact whatsoever to the sales of Porsche SUVs, BMW Suvs, Audi Suvs, or Mercedes Suvs. Maybe like 1-2%?
            Although id genuinely like to know how it sells compared to the others.

    • Mark Hawthorne

      Did you read the article Shobin Drogan? Do you read the news? Land Rover (the brand) is having a dreadful time in its key markets with plummeting sales in key markets (especially the UK and China). This has led to them cutting costs, drastically cutting staff and making huge losses in complete contrast to the profits they made in 2017 and 2016. Better than ever? By what measure? Not profit or volume. Yes they have a reasonably product line-up (the RR is rather long in the tooth) but they are definitely in crisis right now.

      • Howfarr

        The facts and figures are irrelevant because he “honestly thinks”

        • Shobin Drogan

          Who hurt you m8?

          • Howfarr

            *mate
            also i’m not your mate

          • Shobin Drogan

            *Also, I’m not your mate.
            Since, you’ve decided to go that far..

          • Howfarr

            “that far..” lol
            now who’s hurting who

          • Shobin Drogan

            *Now who’s hurting who.

      • Shobin Drogan

        Im saying they make better cars than before wasn’t referring to sales, i haven’t bothered looking at their sales figures.

        • Mark Hawthorne

          That’s not true either. They are still hopelessly unreliable and have low customer scores.

          • Shobin Drogan

            Lmfao, that’s the been since they introduced the first range rover. How is now any different?

          • Mark Hawthorne

            You do realise you are reinforcing MY argument and not your own? They have always been unreliable. You said they were making better cars than before which I disagreed with. You then agreed with me. Do you understand how reasoned discussions works?

          • Shobin Drogan

            Your argument was that JLR is now unreliable.
            My argument is that they’ve never cared about reliability since they were founded.

            Your argument is that they make worse cars now than ever.
            My argument is that they make better cars than they have before, better styling, handling, performance, better in refinement & luxury.
            There are many things that make a car “better”, reliabilitiy is only one of them. Do I wish they would improve in their reliability? Of course.
            But if reliability is your prime concern, then it’s best to stick with a Corolla than a luxury SUV.

  • MarketAndChurch

    Jaguar Land Rover is in the same position that Aston Martin, Mazda, PSA, and FCA are in. Unless they form an auto alliance with each other, or with larger manufacturers, they won’t be around 15 years from now.

  • Shobin Drogan

    Majority of the reviews of the range rovers i’ve seen its pretty on par with what the competitors are offering, only downside is the sluggish infotainment system but in many ways it still manages to beat its competitors in terms of luxury and refinement. When i said they were doing better i mean they are making cars that are more desirable. Maybe i should’ve been more specific? Didn’t know i was gonna trigger you lot.
    Also don’t need to talk like an ass, i couldn’t care less whether or not you agree with my opinion.

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