While the demand scenario remains challenging, there are early signs of a revival in key JLR markets such as the US, Europe and China, said P.B. Balaji, chief financial officer at Tata Motors. JLR said May sales rose 4% to 8,068 units from a year ago in China, where the economy has gradually opened after months of restrictions aimed at curbing the coronavirus pandemic.

“Evoque and Discovery Sport are seeing strong demand; Defender has a sizable order book of more than 22,000 units. Meanwhile, our PV (passenger vehicle) portfolio in India with cars such as Altroz (premium hatchback) is promising and we expect gradual recovery in sales,” he said.

he weak financial performance has led the Mumbai-based automaker to unveil major plans to trim costs in a bid to stage a recovery. That includes a near halving of JLR’s capital expenditure to £2.5 billion this year as against the original plan of £4 billion. The India business will see a 66% cut to ₹1,500 crore for FY21.

“The Tata Motors board is working on a strong deleverage plan, which is a strategic shift to ensure sustainable businesses going forward. If any business won’t have long-term value, we will deleverage it,” Balaji told reporters. He said that the management is looking to refinance existing debt competitively. Tata Motors had a net debt of ₹48,000 crore as of 31 March.

India’s largest commercial vehicle maker and the owner of JLR reported a consolidated profit of ₹1,117 crore in the year-ago quarter.

Sales in the three months ended 31 March fell 28% to ₹62,493 crore as the pandemic and related lockdowns triggered an economic crisis worldwide. Losses soared as the company wrote off assets from its units .

It made a one-time provision of ₹1,419 crore towards impairment of its PV business, followed by ₹777 crore from vendor contracts and ₹353 crore as provision for impairment in units including Tata Motors European Technical Center.

Balaji said Tata Motors is looking to cut as much as ₹6,000 crore in costs in its domestic business this fiscal.

The steps are expected to help JLR turn cash positive by FY22, while the PV business, which was recently hived off as a separate entity, is estimated to turn cash positive by FY23, Balaji added.

Guenter Butschek, chief executive and managing director, Tata Motors, said the “auto industry faced strong headwinds in FY20 amid a slowing economy due to multiple factors —liquidity crisis, high fuel prices, changes in axle load norms and BS-VI transition—all leading to weak consumer sentiments and subdued demand across segments.”