Tata Motors Ltd, India's top truck and bus maker which last year bought the Jaguar and Land Rover brands, posted an unexpected loss in the December quarter but said on Friday the worst appeared to have passed.
The company had no definite timetable for the launch of the Nano, slated to be the world's cheapest car at around 100,000 rupees ($2,000), which had been expected in the current quarter after being delayed from last year.
Sales fell 32 percent from a year earlier in the company's fiscal third quarter. Tata Motors said auto demand in India had severely contracted as a result of financial market turmoil and weakening growth.
"I do believe we had the worst in the December quarter, and don't expect to see anything like that. We are on a positive trend, and on the ascendancy curve," managing director Ravi Kant told reporters.
Kant said he could not give a timeframe for the launch of the Nano, which debuted at the Delhi auto show in Jan 2008.
A launch had been scheduled for last year, but Tata Motors had to relocate its factory from West Bengal to Gujarat due to protests by farmers against the acquisition of their land.
It would take at least a year to rollout Nanos from the new plant because of the time involved in shifting the equipment from its original site to the new site.
"Its going to take time, it's a fairly complex project," Kant said.
Last year, Tata said it would make a small number of Nanos at its existing factories, and had planned to launch the car in the March quarter.
"We are looking at interim measures to produce the Nano in small numbers in one of the two (car) plants," Kant said, but said there was no date set for the launch.
Chief financial officer C. Ramakrishnan said the company was in discussions with banks to refinance $2 billion of bridge loans, having already paid back $1 billion.
The loans, used to fund the $2.3 billion acquisition last year of Jaguar and Land Rover from Ford Motor Co, need to be repaid by June.
Tata Motors, which controls about 60 percent of the world's fifth-biggest truck and bus market and is also India's No.3 car maker, posted a loss of 2.63 billion rupees ($54 million) the December quarter, which included a foreign exchange loss of 2.27 billion, from a 4.99 billion profit a year earlier.
Net sales dropped to 47.59 billion rupees from 72.52 billion.
A Reuters poll had estimated net profit of 761.6 million rupees on sales of 51.2 billion rupees.
Tata Motors had shut some plants temporarily in the December quarter to prevent a build-up of stocks. Its Indian vehicle sales fell to 98,760 units from 144,608 a year earlier.
Sales at Jaguar Land Rover fell to 49,000 in the quarter from 76,000 year ago.
Tata said it had stepped up cost cutting, and Ramakrishnan said the company was looking for savings of 10 billion rupees over three years.
Kant said jobs were being cut both in India and at Jaguar Land Rover given falling demand. Earlier this month, Jaguar Land Rover said it was cutting 450 jobs.
Second-ranked Indian truck maker Ashok Leyland posted an 84 percent drop in quarterly profit, while leading car maker Maruti Suzuki India Ltd's profit more than halved as demand weakened sharply in Asia's third-largest economy.
Ahead of the results, shares in Tata Motors, worth nearly $1.2 billion, closed down 0.6 percent at 149.65 rupees in a Mumbai market that rose 2 percent.
The stock lost 54 percent in October-December, while the benchmark index shed about a quarter.