The Wheels Have Come Off at Jaguar Land Rover
The maker of Range Rovers and Jaguar sedans has had to write down $4 billion. That hardly inspires confidence in its latest investment splurge.
The maker of London's famous "Chelsea Tractors" has lost its golden status
Photographer: Tristan Fewings/Getty Images EuropeWhen companies book a massive writedown, shareholders often just shrug. That’s because impairments usually happen a long time after the market has formed a fairly accurate opinion of the company’s financial position — and a charge doesn’t impact cash. India’s Tata Motors Ltd hasn’t been so lucky in how its own writedown was received this week.
The 3.1 billion pound ($4 billion) non-cash impairment booked by Jaguar Land Rover, its British subsidiary, helped wipe 18 percent off Tata Motors’ share price on Friday, bringing the decline over the past year to 60 percent. JLR was once Tata’s golden child, but the luster has faded as a laundry list of problems emerged. Demand for the company’s sedans and diesel vehicles is sagging, China sales are in a tailspin, and Brexit might make everything a whole lot worse.