Tata Motors said on Monday it expects a significantly weak fiscal first quarter as it grapples with worsening demand and coronavirus-induced lockdowns in several countries where it sells its luxury Jaguar Land Rover vehicles.
Sales at JLR, which brings in most of the company's revenue, were heavily impacted during the last quarter as its key markets such as China and Europe were dormant and its supply chains were disrupted.
JLR will shed about 1,100 temporary jobs after Tata raised the cost-cutting target at the luxury unit by 1 billion pounds ($1.26 billion) to ride out the disruptions caused by the pandemic.
]It will also reduce capital expenditure at JLR to 2.5 billion pounds ($3.1 billion) for the current fiscal year, from the more than 3 billion pounds it has spent annually in previous years.
The pandemic has been a major blow to Tata which had made progress on its turnaround plan to improve JLR sales in key markets. The company in January warned the virus outbreak could impact profits at the JLR unit.
Tata's consolidated net loss was 98.94 billion rupees ($1.3 billion) for the fourth quarter ended March 31, compared with a profit of 11.17 billion rupees a year earlier, the Indian automaker said in a statement.
JLR retail unit sales slumped nearly 31 percent during the quarter, and Tata said outlook for the unit remains uncertain.
The company's total revenue from operations fell 28 percent to 624.93 billion rupees in the reported quarter as India, already facing a bruising slowdown in demand, went into a lockdown due to the pandemic.
The coronavirus pandemic has crippled demand for automobiles worldwide with millions of jobs at stake, and factories and suppliers at risk of shutting down.
The automaker said, however, it is seeing the beginnings of a recovery in China sales.
China's economy contracted 6.8 percent in the first quarter but the world's largest manufacturing hub saw demand reviving as factories reopened in late March after a strict lockdown that lasted for two months.
Bloomberg contributed to this report