After posting 5 consecutive quarterly losses, Jaguar Land Rover (JLR), a Tata Group entity since 2008, made an astounding recovery in the UK, posting a net profit of Rs416.96 crore and helped its parent Tata Motors to report a consolidated profit of Rs650.26-crore in the third quarter ending 31 December 2009.

Tata Motors third quarter profit of Rs650.26-crore was against a whopping loss of Rs2,598.83 crore for the same period in 2008-09.

Mumbai-based Tata Motors said its revenue grew 47 per cent to Rs26,774 crore in the third quarter against Rs18,247 in the year-ago period.

Total consolidated income of the carmaker was Rs26,044.25 crore against Rs17,703.32 crore, a growth of 46.7 per cent.

The company said the introduction of new products and strong continued growth in the existing portfolio along with government stimulus, a benign liquidity environment and overall economic recovery have driven Indian operations demand revival during the current year.

Tata Motors' sales volume for the quarter, including exports, stood at 165,413 vehicles - a growth of 67.5 per cent over sales of 98,760 vehicles in Q3 2008-09, which witnessed steep decline in volumes impacted by the financial crisis.

JLR returns to profit

Tata Motors UK subsidiary, JLR made its first quarterly profit since it was acquired by Tata Motors in June 2008. (See: Tata Motors becomes new owner of Jaguar, Land Rover)

Within a month of acquiring the iconic brands, the global recession had bought the car industry to it knees, especially in the US, Europe and Japan and JLR started making cuts in production as early as August 2008, just two months into the acquisition. (See: Tata Motors cuts back on Land Rover production in the UK)

With JLR losing over $1 billion in 2008 despite a multi-year cost cutting agreement with workers in place, Tata Motors had hired consulting firms KPMG and German firm Roland Berger in July 2009 to suggest ways to reduce costs, break-even volumes, and also increasing the efficiency of JLR's overall operations. (See: Tata hires KPMG, Roland Berger to help solve JLR problem)

Tata Motors was forced to pump more than £1 billion into JLR since the beginning of the global financial crisis, which created unprecedented losses amid plunging sales to UK carmakers, whose survival has been threatened by the UK's banks shying away from lending money for its day-to-day operations.

But with the UK car industry out of the doldrums and the UK government refusal to loan money to car manufacturers despite its much hyped auto sector £2.3-billion package in late January 2009, which remained only on paper, (See: ">UK's £2.3-billion auto bailout only on paper: former government negotiator) JLR was forced to axe a total of 2,000 jobs from its workforce of 16,000, including temporary and agency roles at Halewood.

But JLR was able to make a remarkable turnaround in the in the third quarter of 2009 by posting a Rs416.96 crore net profit compared to a Rs425 crore loss in the previous July to September quarter.

Tata Motors said that JLR's turnaround was supported by better market environment and sustained cost reduction efforts.

Wholesale volumes grew 28 per cent with quarter-on-quarter volume mainly in North America, Europe and China.

Land Rover grew 34 per cent aided by continued strong market reception to the 2010 model year vehicles launched earlier during the year. Jaguar volumes grew 11.5 per cent led by strong growth of XF while the production of the X-Type, as announced earlier, ceased by the end of the quarter. (See: Jaguar axes 300 jobs, stop X-Type production)

Tata Motors chief financial officer, C Ramakrishnan said that JLR's turnaround as "very significant" and added that it could contribute to a good financial year for the group as a whole: "This has potentially improved our year- long performance."