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TaMo shareholders seek a chunk of JLR profits

Chairman N Chandrasekaran says JLR needs to reinvest in order to take on the competition

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Tata Sons chairman N Chandrasekaran
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The shareholders of Tata Motors want the company's UK-based subsidiary Jaguar Land Rover (JLR) to not be stringent in sharing its profits with the parent, so that they, in turn, can reap the dividends.

This year, the shareholders did not receive any dividend as Tata Motors has been making losses for last several quarters while also losing market share. The shareholders made these remarks during the company's annual general meeting (AGM), which was held in Mumbai on Tuesday.

Tata Sons chairman N Chandrasekaran, who presided over the meeting, regretted the lack of dividends to shareholders. However, he also defended the decision, saying that JLR needs money to compete with the likes of Mercedes-Benz and BMW.

"They (JLR) need to reinvest in order to take on the competition," said Chandrasekaran while replying to the shareholders.

During his opening speech, he said, "I know that from a shareholder perspective it is disappointing that the company has been unable to pay a dividend in light of its significant losses in the standalone business. I assure you that we are working with tremendous urgency in this matter and making an earnest effort to turn profitable."

As per the financial results declared by the company, JLR contributed Rs 216,381 crore, or 79% to the consolidated revenues this year. On the other hand, commercial vehicles (CV) contributed Rs 38,722 crore, forming 14% of consolidated revenues. Passenger Vehicles' (PV) contribution stood at Rs 9,442 crore or 3.4%.

Key markets for JLR - the UK, the US, Europe and China - saw the company achieving record retail sales of 604,009 units, clocking a growth of 15.8% as compared to the last year, primarily driven by the launch of the Jaguar F-Pace and continued strong demand for the Land Rover Discovery Sport.

JLR had a strong performance with reported revenues of £24.3 billion in fiscal 2017 compared to £22.3 billion in the previous year and a profit after tax (PAT) of £1.3 billion, which was in line with the previous year, the company declared.

Commenting on the questions raised by some shareholders about the fate of Nano car and whether its production will be shut at Sanand plant in Gujarat, Chandrasekaran, without giving a clear answer, said that they need multiple platforms to grow in volumes and cannot just focus on one product or platform in order to achieve that. "We need to have a holistic view about it".

Talking about the electric vehicles (EV), Chandrasekaran said that the company needs to address the segment significantly. He said that Tata Motors has electric bus and few other vehicles. "A lot of work is being done on it. But we do not have a scale up plan at present and we, therefore, need to address it significantly".

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