Tata Motors‘ target of achieving net zero automotive debt by FY24 is on track for the domestic business but it is stretched for the British arm Jaguar Land Rover, company group CFO PB Balaji said on Wednesday. The company, which had a net automotive debt of Rs 57,000 crore in the third quarter ended December 2022, began the ongoing fiscal with about Rs 48,700 crore of net automotive debt.
“We remain committed to that. We do see a stretch with respect to JLR given that it has lost about six to eight months because of the semiconductor issue,” Balaji said while addressing a quarterly earnings conference call.
He was responding to a query on the progress made by the company on its journey to achieve net zero automotive debt by FY24 that it had indicated last year.
Further, Balaji said, “At Tata Motors, we remain committed to that for the domestic (business). As far as JLR is concerned, we will need to review that in the month of March when we complete the Q4 numbers. But as far as direction of travel is concerned there is no change…”
He said at the start of the ongoing fiscal, Tata Motors’ net automotive debt was about Rs 48,700 crore and then it went up to around Rs 61,000 crore in the first quarter, which has gone down to Rs 57,000 crore in the third quarter.
On the acquisition of Ford‘s Sanand plant, he said it has been completed and it would “unlock capacity of 3,00,000 vehicles per annum, scalable to 4,20,000 vehicles per annum” and “this factory will slowly morph from where it is today to a completely EV production site over a period of time”.
On the semiconductor supply issue, he said, “As far as India is concerned, the supply situation has normalised completely.”
For JLR in China, he said there was an impact in the third quarter due to the COVID-19 lockdown there but all dealerships are open in January but the larger challenge in the country earlier was the supply of cars due to the semiconductor issue, which is progressively improving every quarter.
“…and that’s the journey we will continue to be on,” Balaji said.
On the overall outlook, he said, “We remain cautiously optimistic on the demand situation despite global uncertainties that are all around us. Chips supplies are expected to improve further and volumes will continue to ramp up steadily, particularly in JLR.”
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This was owing to the rising demand for passenger cars as well as medium and heavy commercial vehicles, the company said.