Tata Motors shares plunged over 22 per cent to hit a low of Rs 141.90 following the huge losses. This exposes it to increased tariffs and supply-chain disruptions from a disorderly Brexit, which could undermine its competitive positioning and affect cash generation, said the statement.
"Jaguar Land Rover is facing headwinds on multiple fronts, including geopolitical uncertainty and technological disruption, apart from a sluggish demand scenario in a strong market like China", said analyst Debjit Maji at Stewart & Mackertich Wealth Management in Kolkata.
JaguarLand Rover says half of the exceptional charge was due to an accounting acknowledgement that investments in machinery and plants were worth less than previous calculations suggested.
Jaguar Land Rover, which Tata Motors bought in 2008, contributes over 70 per cent to Tata Motors' total revenue and has been a major cash generator over the years.
The auto maker anticipates a loss for the financial year as a whole for the first time in a decade.
The automaker's loss came at 269.93 billion rupees ($3.78 billion) for the three months ended December 31, compared with a profit of 11.99 billion rupees in the year-ago period.
N Chandrasekaran, the chairman of Tata, stated: "In JLR, the market conditions continue to be challenging particularly in China".
JLR, which is owned by Indian giant Tata Motors Limited (NYSE:TTM), sold 144,602 vehicles in the period - down from 154,447 a year ago - and blamed "continued challenging market condition in China" for the drop-off. It's also streamlined its commercial policies to help compensate for retailers' losses, and launching extensive on-site training programs to improve the customer experience as well as operations.
The global ratings agency has placed Tata Motors" long-term issuer default rating of "BB' on Rating Watch Negative (RWN) to reflect the increasing risks of a disorderly Brexit for its fully-owned subsidiary Jaguar Land Rover Automotive plc.
Jaguar Land Rover booked a loss for the last three months of 2018 as sales collapsed in China.
While JLR, which contributes two-thirds of the earnings at Tata Motors, surpassed the overall industry growth for premium passenger vehicles in the US, UK and Europe, it continued to face sustained weakness in demand in China amid slowing economic growth, Balaji said. They are reinforcing that they are serious about achieving a turnaround, saving costs and taking measures that might be tough.
Last month, the company announced plans to slash around 10 per cent of its workforce.