Tata Motors on Friday said it expects limited volume loss in its domestic business during the January-March 2020 period due to disruption of supply chain from China owing to the coronavirus outbreak.
The auto major also expects Jaguar Land Rover's (JLR) full-year EBIT (earnings before interest and tax) margin to be down by about 1 per cent due to reduction in China sales.
"For Tata Motors' domestic business, fourth quarter performance was already planned to be significantly impacted due to the switchover from BS-IV to BS-VI and the shortage of parts is likely to have some additional impact on specific BS-VI models which is expected to be secured in the coming months," the company said in a statement.
While sharing an update on the impact of coronavirus, the company, however, remained optimistic to end the fourth quarter with positive free cash flow.
"With some flexibility in mix (models, trim levels), the current visibility protects production volumes up to mid-March. The further planning horizon contains some uncertainties which are expected to be mitigated to a large extent; situation could lead to limited volume losses in the fourth quarter," Tata Motors said.
It also added that the situation is, however, expected to be recovered as market demand is likely to improve gradually upon transition to BS-VI.
Commenting on the financial impact on the JLR business due to coronavirus episode, the company said, "Recognising the present situation is highly uncertain and could change, the reduction in China sales resulting from the coronavirus presently is estimated to reduce JLR's full year EBIT margin by about 1 per cent."
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