Jaguar Land Rover
Jaguar Land Rover (JLR) achieved record retail sales of 614,309 in Fiscal 2018, marginally higher by 1.7% compared to Fiscal 2017, primarily driven by the introduction of the Range Rover Velar, Jaguar E-PACE, the all new Land Rover Discovery coupled with solid demand for the long-wheel base Jaguar XFL in China and the award-winning Jaguar F-PACE. Year-on-year the higher retail sales volumes by 19.9% in China, 4.7% in North America and 3.4% in overseas markets were offset by lower sales in the UK by 12.8% and in Europe by 5.3% primarily driven by ongoing uncertainty surrounding diesel.
The total wholesale volumes (excluding sales from the China Joint Venture) were 545,298 in Fiscal 2018, up 2.0% compared to the 534,746 units in Fiscal 2017. The growth in wholesales primarily reflected the introduction of new models offset by lower wholesales of older models, notably the Jaguar XE and XF, Land Rover Discovery Sport, Range Rover Evoque and other models (including Range Rover and Range Rover Sport on account of the model year changeover).
Some of the key highlights of Fiscal 2018:
- All new Land Rover Discovery launched in the US and China in May 2017
- The new Jaguar XF Sportbrake unveiled in June 2017 with sales following shortly
- The Range Rover Velar commenced retail sales in July 2017 (Winner of World Car Design of the Year)
- Jaguar’s new compact performance SUV, the E-PACE, commenced sales from November 2017
- Refreshed Range Rover and Range Rover Sport models (including plug in hybrids) were launched at the end of calendar 2017
- Production of the new long wheel base Jaguar XEL commenced at our China Joint Venture and went on sale in December 2017
- JLR announced that all models would offer an electrified option from 2020
- The Range Rover Velar, Jaguar F-PACE and E-PACE were all awarded a 5 star Euro NCAP rating in Fiscal 2018
- JLR’s first battery electric vehicle, the Jaguar I-PACE was launched in March 2018
- Production of JLR’s 4 cylinder 2 litre ingenium petrol engine commenced production at our China joint venture in July 2017 for locally manufactured JLR vehicles in China
- Construction of the manufacturing plant in the city of Nitra in Slovakia advanced during Fiscal 2018 and the all new Discovery will be the first vehicle to be produced at the new plant from the end of calendar year 2018
- InMotion Ventures announced $25m investment in rideshare company LYFT in June 2017
- JLR is taking part in the UK’s first road tests for autonomous vehicles
- Long term strategic partnership with Waymo announced in March to develop a self-driving I-PACE for Waymo’s driverless transportation service, with 20,000 units joining Waymo’s fleet over 2020 and 2021
- JLR confirmed plans to open a software engineering centre and create 150 jobs in Shannon, Republic of Ireland, in 2018
Tata Daewoo Commercial Vehicle Company Limited
Tata Daewoo Commercial Vehicles Company Limited (TDCV) during Fiscal 2018 sold 8,870 commercial vehicles, lower by 14.0% over Fiscal 2017, mainly due to decrease in domestic sales. TDCV sold 6,859 commercial vehicles in the domestic market lower by 22.0% as compared to sales in Fiscal 2017, primarily due to lower industry volumes and aggressive discounting and marketing strategies of importers considering their higher ordering level. The market share for both HCV and MCV segments put together was 26.5% as compared to 29.6% in Fiscal 2017. The export market scenario continued to remain challenging in Fiscal 2018 with factors like local currency depreciation against the US Dollar, continuing statutory regulations to reduce imports, the slowdown in Chinese economy impacting commodity exporting countries and increased dealer inventory. However, TDCV could increase its export sales to 2,011 commercial vehicles, 32.1% higher compared to 1,522 commercial vehicles in Fiscal 2017.
Tata Motors (Thailand) Limited
Tata Motors (Thailand) Limited (TMTL) domestic retail sales in Fiscal 2018 was 958 units as compared to 1,094 units in Fiscal 2017. Offtake was 682 units in Fiscal 2018, as compared to 1,332 units in Fiscal 2017. The Thai Automobile Industry has witnessed a growth of 13.6% in Fiscal 2018 compared to flat growth last year, the addressable segment of TMTL declined by 3% compared to 14% growth last year. Fiscal 2018 saw the launch of Ultra Truck models. Super Ace was well received in the market resulting in market share improvement to 8.9% compared to 4.6% in Fiscal 2017. During the year, TMTL received its first order from Royal Thai Army to supply 1.25 ton Tata Trucks.
Tata Motors (SA) (Pty) Limited
Tata Motors (SA) (Pty) Ltd (TMSA) sold 773 chassis in the South African market in Fiscal 2018 compared to 697 chassis in Fiscal 2017 and exported 42 chassis in Fiscal 2018 compared to 6 chassis to Mozambique during Fiscal 2017. TMSA commenced manufacturing of the –Ultra 814 and is in the process of assembling new range of TDCV models in South Africa in Fiscal 2019.
TMF HOLDINGS LIMITED
TMF Holdings Limited (TMFHL) – a wholly owned subsidiary of the Company, is the vehicle financing arm under the brand TMF Holdings Limited”. TMFHL’s total disbursements (including refinance) increased by 65.7% at Rs. 15,406 crores in Fiscal 2018 as compared to Rs. 9,298 crores in Fiscal 2017. TMFHL financed a total 1,75,128 vehicles reflecting an increase of 47.3% over 1,18,883 vehicles financed in Fiscal 2017. Disbursements for CV increased by 60.6% and were at Rs. 11,448 crores (115,689 units) as compared to Rs. 7,127 crores (77,898 units) of Fiscal 2017 mainly due to higher disbursements in the M&HCV segment. Disbursements of PV increased by 14.3% to Rs. 2,345 crores (42,619 units) from a level of Rs. 1,542 crores (34,126 units). Disbursements achieved under refinance through Tata Motors Finance Services Limited (TMFSL), a 100% Subsidiary of TMFHL were at Rs. 1,614 crores (16,820 vehicles) as compared to Rs. 628 crores (6,859 vehicles) during Fiscal 2017.
TMFHL has increased its reach by opening limited services branches (called Spoke and Collections branches) exclusively in Tier 2 and 3 towns, which has helped in reducing the Relationship with Supply Chain Partners time to improve customer satisfaction. TMFHL had 267 branches at the end of Fiscal 2018. The book size of TMFHL’s corporate lending business, which includes providing finance to the Company’s dealers and vendors, increased by 179.6% from Rs. 1,150 crores in Fiscal 2017 to Rs. 3,215 crores in Fiscal 2018.
The gross NPA has decresed from 17.9% to 4% from Fiscal 2017 to Fiscal 2018, showing the improvement in credit quality of its portfolio.
MATERIAL CHANGES & COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes affecting the financial position of the Company subsequent to the close of the Fiscal 2018 till the date of this report.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant material orders passed by the Regulators or Courts or Tribunal, which would impact the going concern status of the Company and its future operation. However, Members attention is drawn to the Statement on Contingent Liabilities and Commitments in the Notes forming part of the Financial Statement.
RISK MANAGEMENT
The Risk Management Committee (RMC) is entrusted with responsibility to assist the Board in (a) overseeing the Company’s risk management process and controls, risk tolerance and capital liquidity and funding (b) setting strategic plans and objectives for risk management and review of risk assessment of the Company ( c ) review the Company’s risk appetite and strategy relating to key risks, including credit risk, liquidity and funding risk, market risk, product risk and reputational risk, as well as the guidelines, policies and processes for monitoring and mitigating such risks.
The Committee operates as per its Charter approved by the Board and within the broad guidelines laid down in it. The Company has a Risk Management Policy in accordance with the provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 (“SEBI Listing Regulations”). It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk
The Board takes responsibility for the overall process of risk management in the organisation. Through Enterprise Risk Management Programme, business units and corporate functions address opportunities and the attendant risks with an institutionalized approach aligned to the Company’s objectives. This is facilitated by internal audit. The business risk is managed through cross functional involvement and communication across businesses. The results of the risk assessment are thoroughly discussed with the Senior Management before being presented to RMC.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENT
Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report, which forms part of this Report.
HUMAN RESOURCES
The Tata Motors Group employed 81,090 permanent employees as of Fiscal 2018 (Fiscal 2017: 79,558 employees). The Company employed 24,989 permanent employees as of Fiscal 2018 (Fiscal 2017: 26,035 employees). The Tata Motors Group has generally enjoyed cordial relations with its employees and workers.
The Company has labour unions for operative / worker grade employees at all the plants across India, except the Dharwad Plant. The Company has generally enjoyed cordial relations with its employees and unions at its factories and offices and have received union support in the Company’s implementation of reforms that impact safety, quality, cost and productivity improvements across all locations. Employee wages are being paid in accordance with wage agreements that have varying terms (typically three to four years) at different locations.
With an objective of improving Organization Effectiveness, the Company undertook a structure change exercise with key guiding principles of Empowerment to the Business Units with clear accountability for business results, strong functional leadership and oversight for an effective maker-checker concept, improved and speedier decision making, agility and quick responsiveness to market, and strong cross functional alignment to drive quick issue resolution. The exercise has delayered the organization to 5 managerial levels below ExCom, making the organization lean and agile while rationalizing the span of control for key roles, increasing customer facing roles and providing scope for merit and vacancy based career development. The new organization structure went live on April 01, 2017.
As part of the structure change, a new product line organization has been created with complete P&L responsibility. Transactional roles have been identified across functions for transition to shared services, and therefore focus on core activities. Volumetric study has been performed to identify optimum manpower at each level, bringing the organizational spread closer to global standards. This, combined with the Job Evaluation exercise and Management Audit helped in establishing clear job description for each role and identifying the right talent for the roles.
Placement of Individuals in these roles done through external assessment (for mid and senior level roles) and internal assessments (for junior level roles) were conducted by ExCom and respective Senior Leadership teams. Individuals, based on their performance and the experience they bring to the role, have been given bands within the levels. This will help us provide an opportunity to employees to progress from one band to another within the same level, thus managing career aspiration of individuals in the long run, in line with the promotion and progression policy.
Management is keen on ensuring smooth implementation of the new vision, mission and structure. Multiple FGDs were conducted during Fiscal 2018 with different cross section of employees and few course corrections, like providing level wise designation, concept of personal levels, protection of benefits, etc. was undertaken based on feedback received from employees.