Tata Motors shares hit 10% lower circuit as JLR raises concern over chip shortage

Shares of Tata Motors slumped on Tuesday to and hit the 10 per cent lower circuit for a brief period.

At 3 p.m., its shares on the BSE were at Rs 321.40, lower by Rs 24.65 or 7.12 per cent from its previous close.

It has touched an intra-day low of Rs 311.45 per share.

After a positive trend for a large part of the day, the decline started around 2 p.m.

Jaguar Land Rover (UK), a wholly-owned subsidiary of Tata Motors on Tuesday said that its wholesales were lower than what the demand would have permitted during the April-June period due to semiconductor supply issues affecting the global auto industry.

Thierry Bollore, Jaguar Land Rover Chief Executive Officer noted that the supply shortage of semiconductors continues to be a challenge for the industry.

"We are pleased to see the gradual economic recovery from the pandemic with customers returning to our showrooms driving double-digit year-on-year sales growth in all regions, demonstrating the continuing appeal of Jaguar and Land Rover vehicles. While the present semiconductor supply shortages continue to be a challenge for the industry, we are encouraged by the strong demand we see for our vehicles," he said.

Jaguar Land Rover retail sales for the three-month period to June 30, 2021 were significantly up year-on-year, reflecting the continuing recovery in demand from the Covid-19 pandemic, particularly compared to a year ago, said a company statement, adding that wholesales in particular, however, were lower than demand would have permitted due to semiconductor supply issues affecting the global auto industry.

Retail sales for the first quarter ending June 30 were 1,24,537 vehicles, 68.1 per cent higher than the 74,067 vehicles sold in Q1 last year.

"Wholesales were 84,442 units in the quarter (excluding the China JV), up 72.6 per cent year-on-year. However, this was about 30,000 units lower than otherwise would have been planned as a result of semiconductor supply constraints and the impacts of Covid-19, although this reduction had been broadly anticipated," it said.

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