Tata hires KPMG, Roland Berger to help solve JLR problem
28 Jul 2009
Tata Motors may already have a multi-year cost cutting agreement with workers in place, but it is still trying a new method to make Jaguar Land Rover (JLR) financially stable. After losing over $1 billion last year, it has now roped in consulting firms to solve Jaguar Land Rover's problems.
According to a CNBC-TV18 report, the firms that have been hired by Tata Motors are KPMG and German firm Roland Berger. The key mandate given to these firms is to come up with ideas and new proposals which will look at reducing costs, breakeven volumes, and also increasing the efficiency of JLR's overall operations.
In its latest filing with the UK government, JLR has said that during 2008, its unconsolidated results showed a loss of 673 million pounds, as compared to a 641.5 million pounds profit in the previous year. So Tata Motors is trying very hard to curtail cost.
In fact it already has an agreement in place which sees an annual cost reduction to the tune of 70 million pounds, but that is not proving enough, and now Tata Motors is getting more active than before in looking at JLR operations.
Company vice-chairman Ravi Kant said, ''Teams have been formed and they have been working very hard to work the entire thing out. There are some things which are visible which we are working on and that can be done. And there are some things which are not visible at the moment, we are working on. We do hope that we are able to get some very major gains as we go along.''
Tata Motors must indeed bank on these steps, because the financial losses are mainly due to the huge drop in volumes. For the first six months of this year Jaguar car sales were down 26 per cent, and Land Rover's were down it 38 per cent.
