As an unprecedented slowdown continues to take a toll on the automobile sector, Tata Motors is shutting down its auto retail business Concorde Motors as part of its plan to exit non-core businesses to focus on profitability. Concorde Motors, a fully-owned subsidiary of Tata Motors, has reported loss for the seven consecutive years due to high operating costs and low volume.
Concorde Motors posted a loss of Rs 105.69 crore against revenue of Rs 1,215.08 crore during the financial year 2018-19. Currently, the company has dealerships in Delhi, Mumbai, Thane, Pune, Hyderabad, Bengaluru, Chennai and Kochi.
The winding-up process of Concorde Motors is in the final stages and it will be completed before the end of this fiscal year, reported The Economic Times. The company has sold almost all its outlets, except a couple of locations, which too may be executed slowly and gradually, the daily said.
"We believe the original goals of setting up Concorde have been met and to enable and drive the next phase of growth, we will move out of the dealership business and focus our resources on our core areas," Tata Motors reportedly said on Saturday.
"The operations of Concorde are being seamlessly transitioned to other dealer partners in the various cities that Concorde is present in thereby building significant scale to their business while our customers will continue to enjoy uninterrupted excellent service," it added.
The year 2019 turned out to be one of the worst years for auto sector as shrinking vehicle sales amid economic slowdown along with a tectonic shift in vehicle technology dented the industry's growth.
During December quarter, Tata Motors posted standalone net loss of Rs 1,039.51 crore against a profit of Rs 617 crore in the year ago period, due to decline in domestic sales. The standalone revenue plunged 33 per cent year-on-year to Rs 10,800 crore.
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On the consolidated basis, it reported a net profit of Rs 1,738.30 crore, helped by aggressive cost-cutting measures and stronger performance from Jaguar Land Rover (JLR). The company had posted worst ever quarterly loss of Rs 26,992.54 crore in the corresponding quarter last year due to one-time non-cash charge for asset impairment of its UK subsidiary Jaguar Land Rover at Rs 27,838 crore.
By Chitranjan Kumar