June 26 (Bloomberg) -- Tata Motors Ltd., the Indian truckmaker that owns Jaguar and Land Rover, posted its first annual loss in at least seven years after sales at the luxury units plunged amid the global recession.

The consolidated net loss was 25 billion rupees ($520 million) in the year ended March 31, compared with a net income of 22 billion rupees a year ago, the company said in a statement in Mumbai today. Year-ago numbers don’t include Jaguar and Land Rover, which Tata bought from Ford Motor Co. in June last year.

The Jaguar Land Rover unit had a pretax loss of 18 billion rupees as unemployment and the global financial meltdown damped sales in the U.S. and Europe. Bayerische Motoren Werke AG, the world’s biggest maker of luxury vehicles, and Daimler AG, both posted losses in each of the past two quarters as the worst recession since World War II pushed the auto industry into its deepest crisis in decades.

“Turning around Jaguar Land Rover is a Herculean task,” said Vikas Sehgal, a Chicago-based partner at Booz & Co., an industry consultant. “It’s challenging because a company focused on the mass market with basic technologies is trying to turn around a premium marquee brand with complicated technologies and low volumes.”

Full-year standalone profit fell 51 percent to 10.01 billion rupees from a year ago, the company said May 29.

Tata Motors shares, which have more than doubled this year, rose 0.9 percent to 340.25 rupees in Mumbai today. Earnings were announced after trading ended.

About 120,000 Land Rovers were sold in the 10 months ended March 31, down from 198,000 a year ago, Chief Financial Officer C. Ramakrishnan told reporters today. Jaguar sales fell to 47,000 in the same period from 48,800.

‘Belt Tightening’

The truckmaker may deepen the job cuts at Jaguar and Land Rover and may shut down production if needed, said Vice Chairman Ravi Kant said. About 2,000 jobs have been cut so far, he said.

“We’re making the company stand on its feet,” Kant said. “We’re assisting and facilitating some major belt tightening.”

Tata Motors is continuing talks with the U.K government to secure a guarantee for a 340-million pound loan approved by the European Investment Bank for Jaguar and Land Rover, Kant said. It has the option to get the guarantee from private banks, he said.

Chairman Ratan Tata is paring investments at the truckmaker by as much as 38 percent this financial year as growth slows in India, the biggest market for its commercial vehicles. Tata will next month begin sales of the Nano, the world’s cheapest car, to revive earnings and challenge Suzuki Motor Corp. in Asia’s fourth-largest automotive market.

Tata Motors, which bought the Jaguar and Land Rover from Ford in June last year for $2.4 billion, will launch the luxury vehicles in India on June 28. The company’s biggest overseas purchase has led to credit-rating cuts by Moody’s Investors Service and Standard & Poor’s in March as analysts said Tata would struggle to repay debt taken to buy the U.K.-based unit.

“The bridge from the Nano to Jaguar XF is probably the biggest that exists in the industry,” Sehgal said. “A $2,500 car and a $100,000 car: no other company in the world has a portfolio that wide.”

To contact the reporter on this story: Vipin V. Nair in Mumbai at Vnair12@bloomberg.net.

Last Updated: June 26, 2009 10:07 EDT