As Italy — the hardest hit in Europe — entered the second day of a lockdown, Germany and the UK have warned of the impact on consumption and overall economy as COVID-19 spreads unabated, the BBC reported. There are currently 383 cases of coronavirus
in the UK (up from 373 yesterday) — and this number is growing.
The Tata Group flagship has slipped 21 per cent in the past three trading sessions after the company lowered its financial year 2019-20 (FY20) Ebit (earnings before interest and tax) margin guidance for JLR by 1 per cent (from around 3 per cent) because of a steep decline in China retail (-85 per cent year-on-year) and supply-chain disruption.
The outbreak couldn’t have come at a worse time for Tata Motors’ UK subsidiary, which was recovering from Brexit-related uncertainties and the collapse in China sales.
“This is not surprising in the context of a market-wide demand collapse in China in February because of COVID-19. The company notes that production in China seems to be gradually resuming and 80 per cent of dealer stores are now open, albeit with lower staff/muted footfall,” according to analysts at JP Morgan.
“A demand recovery in China could likely take time and downside risks persist because of the potential spread to other markets, slow normalisation in supply chain, and UK trade negotiations (Brexit),” the brokerage firm said.
“The company is seeing visibility on production up to mid-March and it expects limited volume loss in (fourth quarter) given the ongoing Bharat Stage (BS)-IV destocking. Delays in normalisation on the supply-chain front, plus a fire at its key supplier in Pune (Varroc) could mean BS-VI restocking will be impacted,” it added.