Turmoil at Tata Group, the owner of Jaguar Land Rover, last week cast doubt on the future of Tata's auto group -- although the two British brands were cited in press reports as moneymakers.
In a surprising move, retired Chairman Ratan Tata resumed interim control of the Indian conglomerate, ousting his successor, Cyrus Mistry. In an email obtained by Bloomberg, Mistry said that five unprofitable units -- including autos -- could force Tata to take $18 billion in write-downs.
However, automotive problems seem to center on the Nano minicar, a pet project of Ratan Tata. V.R. Mehta, a member of the Sir Dorabji Tata Trust, one of the company's main shareholders, last week listed Jaguar Land Rover among the company's profit generators.
Aimed at offering a bare-bones but affordable auto to India's bicycle and motorcycle riders, the Nano, which was introduced in 2008, has been a persistent money-loser, Mistry said in the email cited by Bloomberg. "As there is no line of sight to profitability for the Nano, any turnaround strategy for the company requires to shut it down," Mistry wrote. "Emotional reasons alone have kept us away from this crucial decision."