Tata Motors , through its subsidiary Jaguar Land Rover (JLR), has announced plans to raise a privately arranged loan of up to £500 million to support its supplier base and stabilize operations following a cyberattack in early September that brought production facilities to a standstill. This comes as the company reports a significant decline in UK sales for September.

Financial Support and Recovery Plans

JLR's financial strategy to address the cyberattack impact includes:

The £500.00 million loan is separate from the £1.50 billion state-backed guarantee announced by UK government ministers. Additionally, JLR is reportedly seeking to raise an extra £2.00 billion from banks to bolster its financial standing.

Production Restart and Supplier Support

JLR has outlined the following steps to address the situation:

• Initiate a phased restart of its global production network
• Implement measures to support suppliers, including:
  • A dedicated help desk
  • Manual payment system

However, the company anticipates that full recovery is unlikely to occur before Christmas.

Market Impact and Sales Decline

The news of JLR's financial measures and production challenges has had a limited immediate impact on Tata Motors' stock performance. Tata Motors shares closed flat at Rs 716.00 on the BSE on Friday.

However, the company is facing additional challenges in the UK market. Tata Motors reported September UK sales figures for Jaguar Land Rover (JLR) at 6,419 units, down from 10,807 units in the same period last year. Land Rover specifically saw UK sales drop to 6,419 units from 8,993 units year-over-year, representing a significant decline in the British market for the luxury automotive brand.

This situation highlights the significant impact of cybersecurity threats on global manufacturing operations and supply chains, as well as the broader challenges facing the automotive industry. It also demonstrates the importance of rapid response and financial flexibility in mitigating such disruptions and addressing market fluctuations.

Tata Motors has received approval for a significant loan guarantee in the UK, achieved a notable market position in India, and experienced a surge in its stock price.

UK Approves £1.5 Billion Loan Guarantee for Jaguar Land Rover

The UK Business Secretary has given the green light to a £1.5 billion loan guarantee for Tata Motors' subsidiary, Jaguar Land Rover (JLR). This approval comes as a boost for the Indian automotive giant's British luxury car unit, despite reported concerns from the civil service regarding the guarantee.

This substantial commitment from the UK government is likely aimed at safeguarding jobs and fostering innovation in the sector, particularly as the industry navigates the transition towards electric vehicles. The loan guarantee could provide a significant financial cushion for JLR, potentially enabling it to secure more favorable lending terms and free up capital for investments in research and development, especially in areas such as electric and autonomous vehicles.

The approval underscores the strategic importance of JLR to both Tata Motors and the UK automotive landscape. As the industry continues to evolve, this financial support could play a crucial role in JLR's future plans and competitiveness in the global luxury car market.

Tata Motors Reclaims No. 2 Position in India's Passenger Vehicle Market

In another significant achievement, Tata Motors has overtaken Hyundai Motor India and Mahindra & Mahindra to secure the second position in India's passenger vehicle market in September. The company recorded 40,594 PV registrations, marking a 28% increase from 31,581 units in the previous year.

The rankings for the month showed:

Tata's growth was driven by strong sales of SUVs including Nexon, Punch, and Harrier, along with electric vehicles like Nexon EV, Tiago EV, and Punch EV, which contributed 13-15% of total volumes. The company's EV registrations more than doubled to 15,040 units from 6,210 units last year, maintaining an estimated 70% share of the mass EV market.

The September performance was influenced by seasonal factors including early Navratri festivities and recent GST cuts on small cars.

Tata Motors Stock Surges on Demerger Completion and Strong Q2 Sales Growth

Tata Motors shares surged nearly 3% to an intraday high of ₹739.70, leading Nifty 50 gainers. The stock has gained 13% from its September 25 low of ₹655.30. On October 1, the company completed its demerger, splitting commercial vehicles and passenger vehicles/EV operations into separate entities - TML Commercial Vehicles Ltd and Tata Motors Passenger Vehicles Ltd. Shareholders will receive one share of the new CV entity for every existing share held, with October 14 as the record date.

The company reported strong quarterly performance with passenger vehicle sales growing 10% year-on-year to 144,397 units compared to 130,753 units in the same period last year. Commercial vehicle sales reached 94,681 units versus 84,281 units in the previous year's quarter.

Subsidiary Jaguar Land Rover faced production halts due to a cyberattack in September but announced partial production restart. JLR is securing £3.5 billion in loan commitments, adding to the £1.5 billion loan guarantee from the UK government.

These developments highlight Tata Motors' strengthening position both in its home market of India and in the global automotive industry through its JLR subsidiary. The company's ability to leverage these opportunities may further strengthen its market position and drive innovation in the coming years.