Q3 2020 Earnings Call
Ladies and gentlemen.
Welcome to the Q3, if white doing.
I'll start on what those pools to bite and good financial services.
I'd say the mine don't all participant lines will be in the listen only mode.
There will be an opportunity for you to ask questions I'd be into of today's presentation.
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I would not like 200 gone principle with the Mr., that's going on them and then from KBW.
Thank you under what do you so.
Thank you Stanford good evening, if he then I would like to welcome the management and paint them, Florida, giving guests this opportunity.
We have the sturdy Mr B.B. balance eastgroup Cfos Tata Motors.
Just a good that book Chick M.D.N. CEO Dr. motors deficit.
So to speak.
See you dealer Mr. Adrian My Didnt see a full de allowed.
No I know what are the called the management for opening remarks, well what do you sense.
Thanks.
Thanks, a lot of people joining the call.
Unfortunately that was not able to join this oh, Oh somehow I think we also have families who heads up you business isn't as good even though you business is going to the especially those that so without further Ado, let me or this is like last time.
Into comedy of any slide you already have been Nick in front of fuel I draw your attention because it's not going away.
And we'll then goes back so we want to slate do we just those tend the disclosure and then I'll, let me move to Spike Lee.
This is gonna be dead or what's your name and those are in the gift card and we'll do that particularly drawing attention to the almost we backed isn't doesn't add on Bakken doing.
As we moved to the music.
Beyond whatever as well as the abuse it can be on and the launch of the how close was up I saw you and Kevin or the second car from Baltimore and in India was just based on here in Canada and of course, the launch of the in faster.
You need was ecosystem.
The next on TV as Vince So Satish will talk about that lead from the day well even in the fall, but these three very exciting and Oh Gee I love the months away to defend the production commences and does a series of breast lung says Oh, starting with its like <unk> and of course most voters in.
Thank you thought technology was revealed that the ski so.
As we have committed on your product offensive continuous innovation continues.
We wanted the numbers.
It's it's been or your Oh man I think we had a fair number of challenges if you have to deal with.
And in that context, the thing that diluting and even though 9.9% for the board has been good.
Revenue growth of course has been negative 7% and ended up to 40, Bips and particularly the shorting the free cash flow line as a positive with all of them close formula Hormel.
In the game so.
Yeah, Hi, Andrew just summarizing the fulfillment of the quarter the kind of front can you just kind of Recoding JLR, China, given it wouldn't make.
And of course, India, I mean, its TV decline despite market share gain sequentially and of course is continuing to be as opposed to talk reductions in India. The garden or does it actually contributed and up all the detail today and the subsequent phases.
Most embroidered engine to the last year same time be had to 2.1 billion or new badman that goes there.
On a comparable number on a exceptional needs to be taken governmental.
Oh revenue split the you off you know what is one of them and me right and proposition all went the other way and.
He is almost entirely the decline in ER Tata Motors Standalone is already work led revenue declined it does make sense.
Don what does the with BARDA is what we completed the details will be higher than wholesale I've been production that continue indefinitely.
I haven't seen growth, but suffices to say that this was not good enough on overall do you have a challenge with respect to the market condition, because you're talking about it at least appointment I need when the Nick.
Oh on the EBIT numbers moving to slide six the good the ingredient Gina contributions you look on covered almost one enough wasn't an improvement of the overall unit numbers well I don't want us time them on a word about 1.9 doesn't go to that so there's lot of even more from minus point when compared to one screen.
And here again, just spend a little bit of time on either so it doesn't let me answer is all went to eat into Gordon Gilat and as I know I see more de beers and I'll get back when they talk to us in June or do you.
Hi.
Good afternoon evening, everybody on the line, let me quickly go through the Jaguar land Rover details like first thing to note volumes retail volumes the same quarter last year actually a little bit lower 2.3% profitability 319 million pounds. This substantial 590.
A million pound stronger than the same quarter last year.
Ah investment down a little bit just under 900 million, that's probably going to lift up over the course of the next six months or so but well within our target guidance, we've given already free cash flow hundred 44 million.
Cash balance at the end of the quarter 3.9 billion pounds, excluding the revolving credit facility.
Go into the volume de tells the tale of three or four stores. We break this down by region of course over all the 2% la but that includes the substantial 24% increase in China. That's two full quarter of substantial double digit increases we've had as we signaled last time said the performance in China.
It was very much what we were signaling when we spoke to you end up Toshiba a UK is down 11% year over year nose to those are low margin products along with that activity was deliberately taken from the marketplace for that reason and Europe is 10% lower at the same quarter last year almost.
All of that it's actually I pay sales in the Netherlands that was a tax change on benefits in kind actually in January 2019, which drove increases.
Hi.
I would give quarter that we have for European so binary almost all of that with the high pace next page. If you would this breaks it down actually buy back online you can see that evoke continues to be a strong performer. That's the same quarter last year sent them. You model has landed wireless we expect it to do.
Up 30% in the quarter discovery sport up 9%, but like you will see later that increase rate. It was driven in December emo continued bleep going forward a range rather was down versus same quarter last year, mostly again binary in the middle East where as you would.
We estimate there are substantial geopolitical challenges at the minute in terms of the PBT versus the same quarter last year. This is latency the huge improvement 2.5% negative EBIT last year, 3.3% positive this year.
Volume and mix it broadly the same we do continue to have high and marketing cost. So this is a continuation of the story that I signaled in October .
Although point for the increase is actually the residual value issue. We have on 60 Mobiuss in let's say I continue to believe that is contained to the extended 60 money appeared again exactly the same as we talked about last time. This is where the cost reduction efforts under project charge pool.
Can you just from through aggressively manufacturing and material cost plus our structural cost reductions here.
We did have bad news on labor and overhead which is a.
The throw back to the come into made last [laughter].
Because in Q3, we also had a very very strong net exchange number although overwhelmingly it revaluation of the balance sheet due to the 6% appreciation of Sterling in quarter three well. If you look you should cost improvements and the structural cost improvements that broadly adds up.
300, many in time profits and water we thought one of the questions. We'll get today was how does it compared to the.
Previous call. It says that we thought that may help to lay this out in the 4.8% versus the 3.3.
But if things running around but broadly speaking as volume performance and that lets see jail outperformance is better.
Really in the marketplace is slightly worse, but anticipated to be broadly at this level over the next three to six months or increases in manufacturing and material cost most of those a binary one off items of course, we're trying to launch the new defender, which is a piece of that there are a commodity cost increases in the quarter.
Also a piece of that kind of pay off and on Mitra facility.
But they were they were increases that came through this is probably a quota, but you would've seen on the previous light a page was still substantially lower versus let's say to last year, the labor and overhead I'd mentioned already as a result of lower built levels.
Although versus last quarter, well more we were more efficient again on lower D and a because the spend is starting to come through as low DNA here and then the exchange story, which broadly speaking is appreciation bad news on operating hedging doing the job you'd expected to do and the revaluation the balance sheet.
I mentioned already the commodity ideas that are throw back to the hedges we have in place for those commodity cost increases, which I referred to within the contribution that walks quarter over quarter and you wouldn't notice that the substantive reason for the EBIT deterioration is actually in.
Exchange because the next page, it's actually shows how cash outflow for the Purred won 44 million [laughter].
Same quarter, Austria, we talked before about balance cash profit and investment were a little bit short in the quarter, but there's a huge amount of activity actually I'm working capital significant inventory reductions.
And also increases in restrike receivables, but we ended the quarter, we're paying for less supply I pod, if we didnt, though because as I already reference.
Investment is 892 million in the courts that you will see versus prior year reductions in old places, including significantly lower capitalized R&D as you would expect than we previously signaled.
In terms of our liquidity, obviously much stronger we ended the quarter 3.9 billion pounds worth of cash in our bank accounts, excluding <unk> credit facility.
[noise] [noise] and I'll talk more about the debt position going forward.
Thank you.
The strategy, Okay, I mentioned to find that Ah you see that December as the 20% increase this is probably yes, I think very cool becomes more available in more markets. The comparative year over year performance isn't.
The defender vehicle of course, a job one did happen to January as we indicated in October it was going to happen at start of sales still continues to be spring as we indicated previously also the or does it still much stronger than a normal profile for the vehicle I picked up my vehicle yes.
Today, It is sensational excellent [laughter].
Yes, when they should.
Were still signaling a compliant portfolio in 2021 of <unk> talked before about the measurement system changing you will see that the details of how we become increasingly compliant at low levels. All of the 2021 signals still got green takes on them overwhelmingly of course.
Most will need to accept and take these products. So we're watching carefully the acceptance of app he have and our babs sales over the course of.
12 months to ensure that we can be comply through sales of compliant vehicles that was baked goods are in place.
In terms of project charges Nice no lost time, we were going to exceed the target within this quarter and we did quite substantially actually.
To date 2.9 billion pounds worth of cash savings have been generated from the program you see the split there significant increase in Q3 investments and working capital, particularly the two levels, where a lot slower at the end of December than they were at the start of the financial Yeah, and then another 200.
Million on cost and profits I show, mostly I'm, not pre flight <unk>, which I broke down year over year dates from [noise].
Well, even going forward on shot out we are continue into a quarterly charge plus the pluses an extra fiscal year. We've gone through to March 21 was signaling here the value, we expect to be able to get over the next 15 months broken down by an expectation of an improved 400 million position.
In Q4, and 700 million rule and 21 fiscal year. This is the program I also indicated last time that knows the program would shift to anybody tenant there was no profit focus six of the eight large work streams. We are continue with all those although.
Of course, you would expect is to want to continue our inventory discipline, which has been excellent in the quarter and that reduced investment spend which continues to apply the rigorous and therefore the under spend levels. We expect to continue going forward also although investment will peak in the next six months. So so just wanted to do.
Grower attention to one last item in his section.
A significant piece of the F. Why twin T. won't improvements on charge plus we'll be material cost we have a huge amount of initiatives in place to lower they spend within our vehicles. We are doing really well, you'll see some benefits to that in quarter four through a normal.
So close outs.
It was with supply as well, we expect to do even more in 21 fiscal year, we've laid out a bit more detail. So you can see the approach Weve effective you got the car breaks down into 34 component or commodity categories and each one is having a thorough review we're in the phases of the first nine.
At the moment, we will obviously, bringing more details on that program as we go forward.
Finally in a this page is pretty much as we've said over the last six months as indicated last time F. Why 20 is around 3% I.
I do after warn that obviously the position in China is evolving and developing and you have seen over the last six months a significant improvement in at China operation. So there is a big cat point about obviously, what happens from the China market all of our thoughts are now go out the people the friends the family.
Yes, and the communities, we know in China, which of course is Paramount consideration here.
Next year F. why 21, we believe will be in 3% to 4% range as previously indicated investment I am signaling. The full year number is going to be lower still up to 3.6 billion is the new number for this year. The guidance for next year is still 4 billion and then we do.
We remain confident on achieving our plans I do mention here you see the Corona virus again, which will unfold over the next several weeks, but of course will focus continuing launch in the exciting products and the breakthrough technology you saw that the east Sim technology with defender which enables software.
Yeah on the move all live streaming which is pretty neat.
Improve PBT and cash flow of course, and then deliver the charge program, which fundamentally is underpinned the turnaround that this organization over the last 18 months I'm very proud to say finally, the on at Investor Day, we're announcing here to be the 18th of June .
Oh thanks.
Let me quickly ramp off Tata Motors Standalone on domestic number here.
Wholesales were down 25% combination of what market as well as a simple productions you connect that we did not talk about 3400 crores of invensas of surplus or have you done another 3800 this quarter.
And this is an hour both on and the metering.
Oh, the same time, our revenues down 30% ultimately with an increasing competition as well as volume increases that you're seeing in the market because of the disposal vehicle. So.
Oh EBITDA.
1.1% donation to this or they could be the and fundamentally led on the M&A activity declined, 30%, which obviously impacts mix.
And the knick more off expenses all of our onsite gross for the portal.
Free cash flows is an area that we ran a consciously although glass or something that was on the number of making positive happy to report that rebounded to going quarter to quarter positive free cash flow for the quarter.
Most of agreement on a working capital improvements that we are committed to.
The interesting beat as part of the eminent seeding the kind of concern that the market shares have been increasing sequentially as well and year on year bases as well. So have you know things I immediately in the market are gone beyond me on this.
Our CBD bridge you had just all all this on a monthly led out of volume mix and pricing and we talked about the pieces there.
The other line item your managed to keep it under control and the.
The overall almost link phenomena intermodal organs that was mixed on highway.
On slide 29, so long ortho world.
You'll notice that slight pickup in volumes offset by a higher.
And of course or loss or have a one off so there is a PV idle and that if you offsetting this time around the total number of actually starts increasing so overall, what we can't control as cost.
At least four again towards share the amounts to secure or we just need the audiences are coming through as well.
Oh free cash flows offered to us at or above overcoming auto or working capital changes.
And this is something that being said you correctly, we always Smith.
Our investment spending is about owns in cost we expect the in their own finer falls in line with warfare signaled last time.
Our second to me to music and new products and you've seen the product and so that happened.
Oh, you're in January and of course it.
See you overall numbers you see the market share in fees coming through.
And then it's even I LCD equal the the recently one of your starting doses over that is having to see inquiries starting to increase.
Listen demand and hopefully Goldman Sachs on in the investment are expected.
Sure.
Realizations are starting to increases will sign and moving all indications I don't see so it does give us a lot of opus, we look into Q4.
The strength continuing we gradually work or we are the problem Libya.
Although priorities for us I think in fab four so the team is obviously transition or the ecosystem I wouldn't be the on unprofitable reader outlook.
And we continue to keep the benefit and that being a drag or after the one recoveries are number one.
Point in time and retail being hold modest will say something that we are long and we continue to report on that particular I'm going to another.
On the commercial vacancy easily EBITDA number in particular, the there was a onetime impact of all sales tax issue with over 2005 articles six I mean and more than genes that off because of this issue is now.
We have settled as ordinary tax dispute and that's kind of onetime impact of most of our people simple EBITDA number.
Over the other issue Levine and mix or something that does okay appeal.
On the vs six update.
So rich pipeline of intervention the there I think our products already and we will be starting to market in the coming this and the market is going to be the month, there will be shifting gears completely there.
The new fuel also the common and other team the obsolescence managing the savings under control and we hope to Atlanta falls on that particular front and our intense focus on getting feeling really because those are more or less or non doctor and then go to the next level into the deals mechanics elsewhere and so we are.
Good place and see thing that you want to follow on BSS and you already seen than in past Nuvasive and that's obviously organ CDM Smith.
Not just the work of glass.
Adding value and bring beyond and therefore, this adding value to be RMBS and cool piece you increased earnings by new enhancements whatever it may be but the consumer.
Needs to get excited about obvious is product and thats, all we intend to play there.
I would want have village.
Total interest.
On BT side again reduced 30% higher wholesale Oh. This is now complete the first part or oil.
Oh, the also clean, though the distribution network in its entirety as of end of Gen and.
So very very excited about the Oracle so.
No receiving a fight for mobile Jim you talked about earlier and the we.
We have seamlessly transition into the sector on the buildup begun and our systems talked with a Marty.
Quarter low.
I'm very very healthy on we'll see the NPV of October and therefore, it later, we'll get back on our momentum is pretty high.
On the revenue on the overall BNN all the ceiling on the PV cycle L., 19% EBITDA margins at minus 3.6, and a significant improvement from last time.
Again coming on the back with a one off write offs, there and they're starting to trend back into any ought to be but not good enough needs to breakeven mboe orders.
Okay. Good part of the PV favor the contribution margins continues to improve and that's going on for Michael momentum is starting to come back again and it sounds like a volumes.
And the vs. Six range you thought you solve or sorry in the on the press on January 2nd every one of our products has been relaunch and the affording only Williams, where the other than this.
Density that own railcars and I'm, all those assays stocks going on here onwards.
And in particular, what we'd like to all the commonality in other words in vehicle the design best Margarito safety orthopedic.
Yeah, Hi surgeon, Kevin next on an uncle post on geography, or you'd want to be best in class safety any any activity that we wanted to play and that was not just the compliance multiple beyondbio six on all things connectivity.
Intelligent real emphasis coming on board and the whole thing of all the pleasure of driving so clearly an all encompassing food lost launches always like to do and this then brings in the new phase of PV as orders or has it goes up.
And that will eat which.
Okay sure pocket border and wellness category and what you just come back from a timing you know smokes.
Yeah, So that's first quarter Houston soon.
We will market leader with 47% market share.
And which takes us to a market shift to grow 43 person do it can be.
For this uninsured.
And this has been on the back off the success of the Muni bonds to go you even extended range of 200 coatings limits.
Which has been received rebuild by the fleet segment.
It is now the highest sling TV in India, Youre too big to body.
Also we attribute for TV boots due to large the current technology and the first part of their door, we launched or you know beautiful yesterday is an excellent EBITA for so different range of 300 when committed.
We had also done a media.
You know.
You can drive for this lixilan end.
One thing that we bought from most of the media people is that it's the most promising TV available in the market and we have been receiving very strong bookings in response from the person.
We also are the vote on the who.
For opening so.
And there are five our daughter companies, who have participated in this ecosystem and foot part of our has already installed nearly 100 public charges go space cities and by this financial year end.
Turning to do over 300.
These five cities.
Uhhuh has localize the battery pack and going forward, we have plans once integration to for us.
Gruma, we have you know greater who or what do you need to consider which is the students wilkinson or giving an immersive experience bids to experience when excellently and these tools will also this will book and as Trimas when is the car if customers interesting.
Startup chemicals has also been working with us for.
For self manufacturing and or they're going to start the pilot plant.
In Toledo neutral.
And we also have tremendous finance, which has been working with us.
You know on different kind of financing solution for fleet as soon as person segment buyers.
The focus for the next six months is going to be you know continue to develop the fleet segment, which has been though bread and butter of integrated submitted the not maintenance.
We are going to scale up argument for an excellent easy and also.
On the fuel supply on so because response in the market has been the strong man.
We also workover titanfall two absolutely in the process of maturity network.
The five cities in the focus of the focus agrees that we have identified.
And though we also announced there to next to who use we will be introducing couple of food liquids, which includes an excellent.
And the work will be on.
Executions and.
We're also looking globalization of critical UBI conference in London, or the feels manufacturing from upstream program.
And of course, we continue to focus on improving the profitability through better reduce cost reduction efforts.
Thanks.
You know in first strategy of an incorrect previously known as indicated.
And he has a space or the new cars get hold of how there.
And happy to talk more in the queue and FCB.
Motor Finance has started the Insys division is starting to improve in the market with respect to collections, we Havent Autoweb Ian was at 37000 costs.
I suppose is obviously slowed down as though eminent city, because nothing particular, sorry for slowdown.
Funding has not been an issue we have been breathing fun.
And we managed to securitizing the last nine months almost 3000 proposal.
Our book that we had.
What is very reassuring.
There are starting to increase under some of that immunity medical December and we hope to continue that view in January seems to be trending right. So I think we're starting to see this business coming back on all those stresses fundamentally related to that eminent CD portfolio of all other portfolios b.
I will see the big small commercial rate goes up new vehicle. The GNP mpvds trends are quite comfortable it is fundamentally medium and heavy commercial very hard wondering because these are strategic accounts and we expect to see them going back pretty soon.
On the net debt side, just quick flash on the whole the bond issuances of on both in JLR and team.
Reassuring to see the way deals on the ones and what jailer NTM are trending the right way as a component of the business starts improving and as well as some of the more macro impacts like upgrades. It started to come off and we also had an issuance in jail, though.
Almost 1.6 billion pounds, NTM, and having issuance or had funds coming of almost so was this years, including the perfect equity funding situation is extremely.
And.
Although net automotive debt is not going to work hard to go to prototype of course.
Yes of course.
In September .
And the maturities innovative cases with overall liquidity for JLR 5.8 billion from last year, and automotive standalone or can go toward across over 700 and.
Liquidity.
So we want to the outlook I think the other ones return model the only thing I draw your attention to China and India.
In China, the the colonial writers look as developing at least.
You also need to look identical to get this ability of one of the situation on the zones is suspected not just at the mine, but also they seem to supply chain and that's something that we need to keep a close whatsoever.
Next we should be better in terms of information Murphy will come back.
Based on where you in here for the shop economic slowdown and the turnaround or something that we are eagerly awaiting on that front.
In that context I think.
The.
Normally go genes are inclusive if there were four.
JLR, we're looking at inhibitor.
The year.
And the overcurrent or where does this is something that we put out some impact lead to what's that.
Caused the delivery of charge plus or 1.1 billion with over it is something.
Our for them to look apart from other traditional launching referring to expand the cash flow.
Yes, I think the medium to long term plan for the fact that no secrets units starting to see who meant via various short but of course. The key one is the immediate term what happens in the market demand for the six migration for next six months do you expect to be in a fluid situation MSC that often what happens so with that let me stop and.
Over the next slide these are the two critical data very we expect to see you in person shareholder India would have on 12 jewel in India and generating June in the UK and look forward to see today.
Let me hand, you over back you any.
Thank you very much.
Ladies and gentlemen, we will now begin the question and answer session.
Anyone who wishes to ask the questions. Please.
Then one on the touched on telephone.
If you wish to remove yourself from the question can you maybe that stuff into.
Oh, I'm sorry questions to use handsets will asking a question.
Anyone who wishes to ask questions. Please.
Then one.
The first question is front line of Yogesh Aggarwal from HSBC. Please go ahead.
Yes, hi.
Couple of a couple of course, it may just related to good luck.
Theme.
I guess in Europe has four then or.
I mean, it has seen I thought it used to be 132 grams courseware secret divide and it has now tend to widen 56 or has there been any change in the way the portfolio has it so the requirement. It's just that and then related to that.
Steve This year.
He did appealing that the mobile Oems will focus on the large because to achieve this year to requirement and you guys seems to be comfortable there at all to gain some market share in the Dod that you'll be.
Space in Europe , and then lastly, anything and I see it seems like them, but they're not picking up be that in U.S. or in China. So anything that owned IP is and how do you see a bit amping up.
Okay.
It's been ramping that.
Yes.
Yeah, I'll take that let me start off with the last one if you wouldn't mind so.
I placed volumes are very sensitive to.
Incentives within government, you see not particularly within this quarter data versus the prior year, Netherlands, particularly Netherlands actually in the quarter turn off as much slower than the same quarter last year's benefits in kind.
For the 13% in January 2019, so that's that's a really large illustration of.
Okay place is currently thinking about our I pace and there are cost benefit in kind changes, which are going to actually kick in in April this year in the UK.
And we expect our UK volumes off the back of that to increase now in terms of the target that we actually have set we know we told you before about the actual target acting regime, having changed so were actually showing it here versus the 150.
Six W out TP level in 21 calendar year, we think will be compliant against that but the big point here is the link that's why I started off with high pace of course, the big point here is it really does depend on the acceptance of the cuts.
The products that we have made available. We've also shown on this page all of the actions were taking on a whole portfolio to make electrification.
On a Boe to all of our customers and potential customers. While men have been if you remember we showed last time and have itself drives the 12% predict produced C O two level to a p. have.
And if you remember from last time that he have will drive a 70% reduction in the C. O two level and of course, the bad this 100% reduction so the vehicles.
Hey, liable for the customers to buy the incentive Ization really does drive that tipping points of excess demand. We are expecting improvements in the UK market going forward from April and you can see there on the pages a huge amount of other activity happening with that engineering.
Factories with smaller smaller ice engines.
Well I platform being using lighter weight materials in several other things allow thousands of engineers are working on I think the big on known as for the next 12 months really will be the except that not only the the I pace, which you asked about but the other p. has that we bring in play.
I just don't forget the discovery sport gets a p. have in the first first quarter next fiscal year that is our biggest selling products or the response consumers and customers to discovery sport will be huge in terms of our opposition of the cost of the next 12 months, but the cars are available.
Could you repeat your middle question, if you wouldn't mind please.
So I was wondering you know there are two things happening that some launches like xseventy late in the larger they TV space, but there is an odd percent that to achieve that topic here to target somewhat.
Be focused on the larger at TV [laughter] diner gave you guys and opportunity to gain some share that piece for the.
The top end they deal with it that is there something you you are looking at.
I look we're balancing out the optimize position to profitability MB Incompliance, So where we can actually drives more vehicles at the higher end about range you know charge plus actually has specific workstreams around that so we will certainly be looking to do that when you look at a higher end and of course, they have pm offerings within them as well.
Of course, right. When you look at our high end vehicles in the performance range Rover sport, even though it's in years seven is actually higher versus the same quarter last year and range Rovers a bit lower now overwhelmed is result of the issues that the load has in the middle east to both of those cars.
Selling extremely while we expect them to do so over the course of the next 12 months, a cat pointer and how many p. has actually get sold that was this high it's 20% over the last few months. So we are hopeful we continue to drive high valued margin vehicles, which have which appear to them as well.
Thank you so much.
Thank you.
Okay.
Thank you.
The next question is from the line of promote from CJS.
Please go ahead.
Yeah, Hi.
With regard to charge plus program, where you see in share ticking up a pretty aggressive targets and off which nearly 30% 40% is front loaded in this quarter.
Easy because of the low hanging fruit or do you guys started walking up.
Much earlier in the goals and why are you using so much of confidence.
Yeah, that's that's two or three things specific to quote to fall.
No says I'm not continuation of programs, so that maybe a little bit more investment not very much.
But the material cost we atmosphere settlements actually happened in the final quarter, the and which we're now in the final quarter. So I'd expect to become a portion of the saves actually pain on the material cost program and you've seen for the last two to three quarters. We've had really strong performance on structural cost reductions is while we expect that to continue.
It will definitely have a fast start to the 1.1 billion in quarter. Four we will just have been helpful by breaking that out for you.
And the second one is with regard to defend or are you declare it to give you a some indications on the same but can you give some color in terms of what type of capacity headroom you have as you indicated you guys are surprised by the initial response and what potentially toys anyway.
Portfolio.
In terms of proportion of mix it can bring it.
Yeah, I will give you any detailed numbers with I'll simply say at this point bearing in mind, we haven't come from sales dates we have more than a three month order book and that's probably need to this point in time, so let's say over the next three months ago, we'll be able to confirm when we next talk formally.
The vehicle that now on sale and I'll be in a much better position to off because that was specific questions. I mean broadly speaking the first sales of any vehicle is always very rich.
Because most of the people like the new bakery specify them very highly so I wouldn't want to mislead you can give you the data that we haven't friends of us.
Okay. Thanks, it on the list.
Thank you.
Okay.
The next question is from the line of Robbins from Bernstein. Please go ahead.
Hi, Thanks goes up.
Questions. Please one.
In terms of the variable material cost savings that you pointed to as part of choice plus I'm just wanted to understand the drive results.
And then on you guys given to explore more volume that something.
Yeah.
I believe volumes.
And the components when you bought four months I've learned cost.
Simply you've got better pricing like for like from the same suppliers. Some color on that would be helpful. I'm. So bullish.
Could you quantify what warranty costs were during the current during Q3 and then.
Allergy.
Okay.
Months ago, you it indicates that the you one confident the.
The guidance range is lower than 46%. So just wanted to get your latest thoughts on the where are we.
In a person. So you are you still sticking to the four 6% or or we call since or potentially going lower thank you.
Let me take the first couple of questions. If you asked for me as so variable material cost I would actually points to the difference. The charge program is brought them forget what we're doing with this program will wrapping all of our specialists teams around the host function. So all of our analytics teams our ability to you know.
Really analyzed in truly have data in front of us, which enables us to to what we would suggest claim and appropriate David Misapply.
And it's broad.
Most of this year versus last year, driven I think by the time were done up to 100 million extra cost safe.
Most of those settlements actually will be close over the next three months a third of them being closed in January Ah, Yes. Some time to time, there are M.L.A. or any other future product used at leverage of course, the next ones that are from our ally made and hi.
I volumes, but it isn't ready the overwhelming substantive pieces negotiations that most of them as the forensic analysis that we have actually been able to do.
Warranty costs now warranty costs as a percentage of revenue was pretty much smack on what we were saying as underlying anyway pretty much smack on what we're indicating last time. It was about 4%. However, one of the impacts we add here as a result to the appreciation of Sterling is the warranty liability.
It's actually reduce like for like and therefore, the optical number you will see and warranty is a little bit lower I think 3.4% to revenue.
The underlying the stood at 4% level, which was the range I indicated to you about six months ago.
It is repeat your question that you have I lost you in between.
Yes, so I think what what other times we spoke.
But you want to guide for the 6% for for warranty cost.
You want.
You didn't want to support in the markets like like driving lower because there were so I guess the potential for surprises every now and then is that still the case are you still.
The potential for surprises go still there how close do you think the company is good and saying, okay, 4%, 4% to 6% is far too.
Hi ever raised some weeks it starts to go lower.
I think I mentioned that you may have followed up balaji, but I think I mentioned that I'm pretty much. The first call I did in July 4% to 6% was mentioned at that point in time, because the first quarter was at 6% level I think I attempted to say that the band here underlying performance my expectation will be closer to four plus.
Ascend. However, we've also signaled we will do the right thing and therefore, if recourse come along we'll call them assumes we need to and if there's opportunities to do campaigns customer campaigns as we did in quarter one.
Which we feel ultimately will be a payback for the organization. We will take those is well over the course of the last six months neither those two.
Items of actually happened underlying over that period is being at the 4% level, we obviously working tremendously hard in several areas including too.
Improve the efficiency under the capability the engineering factory, we track all the early data to see that they're a very small signs of improvement, but it's far too early for us to show them in the financial results. We have a roes are the road for warranty, which was set eight years again will continue because it enables individual baked goods to mature.
We actually show the individual performance you know it come off the back of disappointing launches on 18 and 19 modeling. This and we are determined to make sure we get to find the right which is why we're continuing to work on that product. We continue to hold it and give a release date for the spring because we want to make sure it's really to the market.
Nice when it's ready so everything we're doing is attempting to approve the immediate quality performance and accelerated that to improve it with a new vehicle quality. So I will continue to say, 4% to 6% only because it gives us the capability to do the right thing at the right time, but over the last two to three quarters under.
I have been close to 4%.
Let's go to page it if I may it sounded like from what you said on.
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Okay, but most of the surgeons who are cheap through.
You know your forensic analysis, but essentially getting better like for like pricing from the same suppliers.
Would you say that's correct.
Yeah. The I mean that so many things that go into that line item is as I'm sure you know, but what we try and do here, we try and pull out the non variables like commodities and such and yes light to like pricing has actually reduced from a number of our supplies.
Understood. That's helpful. Thank you.
Yes.
Thank you.
The next question is from the line of Kapil Singh from Nomura Securities. Please go ahead.
Hi, Thanks for the opportunity Oh, one question firstly on the financials, you've seen a bit of volatility indeed on material to sales ratio last quarter, we saw big improvement and then.
This quarter, there's been a sharp increase so what is a key reason for this and also if you can exceed the precision targeting seen a sharp drop.
Consolidated number.
For Jaguar land Rover.
Right.
Well, Okay. So you know raw materials to sales it encompasses pieces that I've just mentioned, but there are several other elements in that were increases in commodity costs in the quarter I think pgms.
Increased by about 9% clearly deposit terminals on the mix of vehicles, we sell the derivatives, a very because we sat in where we actually sell them with them. We gave a richer sales mix profile in the quarter, which generally means the at the material cost pieces increase also and as well.
There are numerous factors that are involved here, what we attempt to do within the analysis as well and of course exchange rates is a huge factor, particularly movements on the euro as well because we buy a lot about all that parts from Europe , well, we attempt to do with the analysis for you withdraw rise all those things and Nonconsolidated down.
Into what we would consider to be the performance driven items, which is really back to the decision he can't it.
Can you can check going now clearly tonight, because they had nine minutes Uh huh.
The U.S. speaking with that's.
Hello.
You May go ahead Sir.
So while I tend to do is make sure we point to the to the actual underlying pieces, which I think are the ones that will determine performance going forward, hence the previous discussion about our efforts to reduce like for like material cost with supplies, which we just had with Robert.
Okay, and depreciation charges also seeing a drop or any color there always will shape up with the depend a launch.
Yeah, well you know the defend a launch obviously from job one which was on the eight of January we start to we start to increase the depreciation charges. They will increase in this quarter, you're in and going forward that project. We are convinced is going to be successful. So the overall product will return to the bottom line.
And after increases in investment costs.
Okay, and just what just one more I wanted to check on the product launch side, how many new products are we looking at the weather next two to three yards on both the Jaguar and land or was that.
If I like where they're at a full model changeover on a new completely new back.
I won't give you numbers of models Palau cadence still continues to be that seven or eight year replacement cycle.
And there are likely to be to all new products on top of them.
One of age.
With a mid cycle refreshing between yet.
So there's a lot of active when you go into the present.
Andrew.
So when you go into the isn't a presentation yos, you'll see the immediate one that even the f. type, which I could have excluded from that discussion, we're going to super new launch on the Jack your appetite that goes on sale later this quarter and of course, we talked about the defender already.
Thank you I wish you all okay.
Thank you so much like.
Thank you.
The next question is from the line of so little bit from UBI Securities. Please go ahead.
Do you mean, thanks for taking my question or two questions from my side, one on starting off with the Jaguar land Rover question or I mean like on the cost on the basically yes, you or achieved on the targets in charge, but you've sort of under achieved on the cost and preferred so operating cost when stressing on that does.
Basically the quote from the cost structure side I mean, the improvement that's probably still not a bad.
Hi, So I just wanted to understand like I mean like are there I.
I mean, I know, you're continuing with that and sort of going to further but so.
I mean like.
Are we seeing any room for I mean, like I mean, the focus of charge. That's also seems to be motivated, but I mean under fixed cost side do we see room to guard costs more I mean.
You know again be employee cost so sequentially increase so just want to understand how much of fixed costs a reduction do we expect to going forward.
Let me correct. It for the first point you made don't mind.
Let me correct. The first point, if you don't mind, we haven't yet missed any of the targets on the charge or the charge plus program. We did say we would deliver billion pound profit improvement through to March 2020, where its 700 million. After after the first four quarters of that you can see.
For the last two quarters at least we delivered 200 million pounds a quarter that gets you very close close and I've referred to material cost already so we haven't yet given up on the billion pound target. We set although we have rolled the targets for another another 12 months beyond that.
As far as structural cost the concerns you know that 200 million pounds of course, allowing them. The same quarter last year, that's pretty neat, we think and yes. We continue to ensure that we don't add cost why we don't need to and we continue to take actions, where we still have inefficiencies within our operations and you know.
Uhhuh start to add some more those going forward when were <unk> 0.2 Tonight.
So I think we're doing a pretty neat job. That's always more you can do we're trying to balance the cost structure and our ability to ensure that we can take revenue growth opportunities also and that's what we package really neatly within the charge plus program and I think when we talk in May time, you'll get a much better sense a follow up to your first.
Question and how much we expect the proportion to that new program to start showing value in 20 on the screen.
Sure. So that's sort of eminent just to add to that Vista or put in perspective, the navy involving sharp event of the cash first and then event after the fixed cost structures and now I'm going to realize it's an area where almost the opposite adjusting for non debating that but I think there's a bigger price to be habitats.
Activating but under the new made an assignment although people than efforts for some years ago. We're now working on those areas, where waving cost Nvidia should be focused and taken out and that will then give you an all breakeven that will start coming down we need to work on both the numerator and denominator, if you're going to breakeven stock. So that's how the sequencing has been done.
In line with the kind of issues, we had a year back on cash and the end operating leverage Navio thing has not been the main issue not binyam need to start looking at other benefits. It's just a calibration nothing.
Just a follow up on that I mean, I mean, the recent news flow down 500 reduction in time inboard, that's part of the existing Oh boy production.
That's not a fresh thing.
Oh, I mean individual programs, we announced when they're ready so the 500 people it will be leaving a haywood facilities in April it's an efficiency program was going to speed up the line and therefore, we need fewer people were going to invest up to 5 million pounds to break bottlenecks on the line as a super.
Back it's a similar.
I've just said, it's a great illustration of I will continue to that your opportunities as they arise to become more efficient.
Okay and my second question is on India, basically I I'm, what I'm confused about a little bit it's I'd be realization for you when it gets dropped like 12% quarter on quarter, even though I don't really see them mix change being bad shop, right, So and the T. I understand it slightly law and exports to them in one way to go into.
So I just want to understand is there something getting knocked out of the topline itself, which is sort of pushing the excuse me.
Robert I.
I think the main one that you all know because the increase in the EMEA do they see the order numbers are there you will you will notice that the pricing. This has got impacted because of the higher really does it get all the various or inventory in his inherited earlier, we're doing the lower the cost and the literally doing the hires and that's the reason youre.
Realizations are down and hence you'll see the transit.
Oh I'm sorry, the 340 grows the same expects the there is that sort of getting.
And was less and less than the other cost items. So.
Other expenses.
Operating expenses.
Oh.
Thanks, a lot like yes.
Thank you.
The next question is front line, especially when they come out from the pointing to a mutual funds. Please go ahead.
Yeah, but even the trade my question was what is the progress in China, If you could the square kilometers.
Describing how youre doing in China, and how is that strategy fair playing in China on cost improvement quality improvements and the reach.
Yeah, Okay. Let me, let me reference that ebay as I answered. This initially we can talk about the import business, if you wish so which to afterwards as well.
So just to remind the to everybody you know for I've asked five nameplate within okay. They are in refresh between August Austria.
Q. This year you start to see within this quarter's results. The first full quarter of the new evoke ER and you know a marketing support on about dropped by a third in the quarter that's encouraging.
By far the biggest impact.
Packed in the JV overlap period of time will be the new discovery sport.
Discovery sport due to government sale on the 20th of February it's half volume for the see Gela business goes on sale on the 20. It's in February of course, with the sad events in China at the moment that launch will be impacted with.
Thinking about doing at the virtual online loan Trogdon physical presentation issue to who only too but that decision has yet not be finally made the virus will certainly impact Q4 results to what extent will now over the coming weeks. So the base business is getting stronger as fresh product comes in.
Place you would expect that.
We were targeting the operation to improve again in the court where in of course of ours may impact, but if not in the following quarter. So I'm expecting the CGM our performance to be stronger, particularly is that discovery sport product hits the market place later in the you know we talked long.
Time about you know agreeing with the dealers that we would support the older product into that's flush through discovery sport has been selling really well actually in CLL. Besides expensive discounting around it as strategy is to clear the old product or we get the new one and that strike.
He was working perfectly well through to the third week in January in fact as sales in China.
We can generate both CTL, our import where you know a little bit stronger than we were expecting of course as mentioned two or three times already that improve we put on hold my recommendation will be to judge the.
First quarter last fiscal year next year, when you will see we all hope the improvements that we're expecting through the discovery sport have momentum is built on the evoke and then also we have they accept long coming along at the end of that quarter, but I'll be a smaller product launch for us So getting better now why we wanted to be were very aligned with that.
And it's about what six looks like and will be measuring that success on a quarter by quarter basis with an improving program.
Import business with stronger as you would've seen from the data you know the big the big met with stronger in quarter. Three so the range Rovers I should be fives. So we had a nice we had a nice quarter Frac, China import business and you know the comments regarding this quarter would would continue for China imported from.
And so what is the single most factor, which is required for you to close the gap.
Leaders in China.
Also in light of that slows Oh.
Let's say opening factory, there and now starting to produce the electric rate.
Well, you know with different models to.
Tester in China, We don't have an electric vehicle produced produced locally and their electric profile is very very different too I like to profile. As you would know also of course, so and model is still overwhelmingly in import business, which at which you know has most of its project.
To be P. have smiled hybrid and ice engines that the minute.
It's a lower volume higher margin.
Business model as you would also know and you know we're not too worried about what Tesla does actually were worried about there being very very focused on the fundamentals of our business. We talk to you about those fundamentals on several occasions, making sure that the dealers are meeting their sales profiles low.
They they did even stronger than that in quarter, three but we didnt Chad it's because we've already beatson those targets, we set making sure the dealers return to profitability. They were profitable in quarter. Three again, we Didnt show you that because we told you that previous quarter, making sure inventory was lighter.
And they've already achieved in a bit stronger marins. Good targets. So again, we Didnt show you that because this is just a continuation of what we did in Q2 continue going forward.
Let's get through Q4, and see what happens in China, and then if you wish for more information we can start to show you know.
Thank you very much. Thank you for the same thank you.
Thank you.
The next question is front line Shotshell from me device. Please go ahead.
Thanks.
So I suppose question is on India business.
Two things one what are the normalized margins for the business and the related point that out of is to improve the cash flow. We are compromising on profitability is it the right and so you can just help us understand what did they normally because there was inventory clearance windows 10, one offs. So going ahead how.
We look at the margin endeavor.
Yes, I think we've we've talked about three or four out of modern margins plan out there and we also stated that we're quite confident in the medium to long term situation there.
And as far as the current situation is uncertain, yes, there was an inventory correction that you're all of them onto fight it as well.
And at the same time, you're also seeing a lot of operating leverage because the volumes, particularly in the medium and heavy commercial vehicle, we see margin starting to normalize the being eminent cities talks listing backwards normalizing the.
And.
We would love to see that component of them later.
Yes, I am not able to understand your question on working capital was offered are going to be.
If the question is you're asking neither have extended for it doesn't have already being more growth I mean pain or constant as a categorical no.
And you will notice that every line item on the working capital is being booked be inventory receivables be payments all three and that's how we would want to ER tighten the give founder.
Oh, well, what I was referring to is your balance sheet in cash flow improvement seems to be far superior than yours profitability performance.
In this quarter across businesses.
So how should we look at the fine balance between the two going ahead.
Yep.
I draw your attention to slide 30, we basically pass the free cash flows for the quarter.
Recollect that this was the working capital as one line, but actually went on back in the first quarter as we said that.
We did or in saying that.
We have every can anticipate the size of the market dropped at how can we just couldn't Baker and therefore, we believe is slow and we started correcting it from July onwards, and you'll see an improvement that happened in July .
Alternative Nova secure so I will not on a fully other basins. The working capital number should normalize as you're not expecting a dramatic shifts either increase or decrease.
Don't hold me to that last one visit but the broaden it needs to be stable right all right on the working capital insight to the Aaron judging the market in the bus orders way, they look and government control so to keep the working capital Atlanta side and the cash profit after tax and the compare that to the investment our challenge has been on the gas properties.
That's because of loss of operating everything that we talked about earlier.
So as we go over and I am expecting the inventory corrections to more or less clear bottom up in Q4, and then after the buildup of inventory in the dealer and we'll have to start investment needs. You will have the division video wholesale will be higher than retail just perfectly fine filling back stock levels there.
We'll be back and it needs to be normative Needham and then you'll see the business starting to burned about momentum for all those depends on how strong the region growth.
And that is where the expectation that the investments in infrastructure with the government has talked about Oh and all the GDP starting to pick up we should start seeing and the days that starts moving then you start the whole thing coming back to what it was you run two years, there's nothing wrong in terms of getting back to respond to take the senior business or an EBITDA of learned enough for single.
Do you believe it does there for many many corpus and therefore that feels like a sensible number for this particular business and BBB donor journey of building back maybe there's a breakeven, which you've delivered for Europe , and starting to come back again and get closer than ever and explicitly that we want them Gil Midland get ahead of that and get to an EBIT breakeven and PBT.
Breaking them out of the journey that your onto.
And we should we should get back to the joining me on this in the sequentially improving this quarter and we intend to keep it that way as we go for.
And then my second question on on the charge last Oh.
So why only 700 million us improvement targeted it because the way you have indicated on I mean, if aspect there you're looking at that seems to be a much bigger opportunity.
Oh, no charge plus plus 21.
Can you just highlight how and why only a particular number other than a guidance else seven and it doesnt mean kind of a number.
Yes, sure what were working up to basis that in almost all that number next year will actually come from EBIT improvement.
So we don't expect to significantly outperform investment and or inventory, we think with the levels, where we need to be on those areas. At this point in time, we will continue with them to ensure that the disciplines reinforced within the organization because all turn around programs have to basis.
Dynamo and they become sustainable by making sure that the people doing the day jobs do it for a living and Thats why that mostly in the program. The roles that we have in place for that was will stay but the level and scale of opportunity on those areas is much much lower and fytwenty wanted overwhelmingly being targeted towards eight.
Great value generation material cost reduction and again, you know within three months time, when a little bit more and then three months after that little bit more than that I can assure you if there's more value in those hills, we will go get it.
Yeah.
One last housekeeping question, if I can just on it that TLR has reported and again that's in this quarter. We go down 50 number seems to be higher than PBT number.
So you can just explain and how should we look at the going ahead.
Then I will take place.
Okay. So we did actually gotta catch up in the quarter for the recognition of the deferred tax asset, which hadn't been in place for the previous quarters. So I think it's probably better things we looked at least get state data in terms of the normalized level of tax. We showed we should expect going forward. That's a one off catch up.
The previous Jim as well that's a good sign.
That really is a good sign in terms of the growing confidence the underlying physicals and the performance of the organization, but it's gone rates one off its catch it for the first six months to the air as well as the quarter. So let me encourage you to look at the nine months rather than the quarter result in tax.
Normalizing they don't Wendy I presented at attached to it is there like number to look ahead on that rich or whatever.
Yes, it's a little bit lower than that I would suggest when you go through the details there's actually a small considerations in you would imagine but broadly speaking a lot lower than 25, probably closer to 20% is a normalized.
And if it's not at that level something ounces likely happened really depend where we might get profits within a given within a given courts recourse.
Thank you and all of us.
Thank you know thank you.
Thank you.
The next question is from the line up for lunch and good stuff from deferred capital. Please go ahead.
Hello, I have just sushi.
What is the view of the company in the Indian luxury car market.
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Lot of mine on the line.
Since then the opening.
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Yeah I.
I just wanted to know what does the view of the company on the Indian luxury car market as it still largely dominated by most seasonality.
Yes.
Yeah.
Thanks.
Mike I mean, it didn't really orbitrap or would you want me to get up having to do that.
Yeah right now.
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Yes, right from your number three in the market and set a more by going artisans market on site and it is a business that has been doing there just for information just launched the more today in India.
And therefore, it's a business that we continue investing we have on manufacturing that appeared we also have only manufacturing.
Thanks.
And it's an exciting market that we have all here, having said that does does not market as well have struggled in the last one year in terms of growth rates similar to the rest of the market.
And overall market Cessna more of your thousand vehicles and then it is and has not been.
Dramatically growing unlike what we would like to see in such Japan, China for instance, so that is.
His appointment in terms of the potential those markets, but I think all Oems sub premium Oems our play here and.
Honestly focusing on this particular market and we believe that we have done a pretty decent job in terms of almost of being shared what we currently operate under and intend to continue to work where you've been pulling that there.
Oh hang and my second question is a as the shifted happening towards the electronic vehicle front or what is the under I thought I just launched their next on units what does a number the company's targeting.
We don't give numbers in terms of obviously when do the line items and you didn't give us an along there was this more growth has broad but higher than market is what do you want to do but the potential of the market and how we have senior living probably handed over to finish.
Yes, so if you really see next on TV.
Okay great.
Or some segments TV product, so first time broad being phased out when it goes towards Nic going to partners, yes. So for the differences that we hired in the past was.
Product, Mexico, Piggledy view or might you medical.
Which was absolutely that if it were different segment, which is a few segment.
Then you had cards, you know, which was launched by a few other players.
Which will make mainly security operations and look guys, maybe can you frame that.
And we know the demand you know references sure, but absolutely we have no clear in terms of what can be the potential of demand that's going into this vision is concerned although we don't pick in some evidence.
Yes.
But this is first next two months as will be reminders companies is for us.
And then it will be good.
What we didn't want in June of this product when you have to make any reference for example.
We will take the reference awful in the CV segment, just come back so actually we segment.
Those automatic transmission costs, which are being sold will be a volume trends.
And we would like to a you know so can share of back.
That's how we're approaching this.
Demanded a submission I would say, but I think in the next two months will be clear in terms of working business, but so far the bookings have been pretty strong.
Much more than one units.
And.
Maybe rather than focusing one who ensure that we are able to meet the demands.
Local supply side.
We have a one challenge differently in you know in front of forces the China situations yeah. So.
No. That's that's the response to your question.
So the actual under.
Thank you.
Ladies and gentlemen, Thanks last question from the line up 34 done from the pondering their mutual funds. Please go ahead.
Hi, just a couple of questions, let me see side or why names or could you just talk about this could be quite is what you're seeing Arvind Aholic segment by segment. That's question number one second does in terms of conversion RV also seeing similar conversion in the sense. It could even conversion there or is that does not happening if not why.
Pardon me any thoughts on scrapping Sir.
The three questions.
Rich.
Right so.
I think the.
And where is that we are seeing.
Our.
We've looked at work will suffer.
And water for different reasons.
I think it blows out because there are few projects with just harder.
On the payment levels of started happening to some of the existing projects.
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To put a demand have come back.
But he was also and I knew phenomena that was one suman.
Last year the mountains actually got delayed.
Well the launches were working very.
Okay.
And that's what you saw a hub say.
In terms of convertible essentially the inquiries are coming from the fleet owners largely going as you go live and essentially for replacement of their word.
We have three vehicles.
Which will do them.
Better economic.
Got it makes lot of economic sense for them because a useful vehicles have better gives us comfort would be a three so thats, where you're getting a demand from.
I will say May I think there is not much demand. This is coming from the retail segment you didn't segments.
It's not as quite as one is you see in the last few moments segment, which is essentially for replacement.
In terms of conversion I.
I think.
I refer you recall last call also direct customers.
They are ready for.
I do see they can get because yes.
But with the demand supply imbalance, having changed now essentially go reduction in the soft I think the illusion that also firming up and there you living and Youll also see the.
Conversions happening during the month in north essentially during the latter half of the on last week of the month. So this is what is the sequence breading low volumes.
In the sense I think what do you feel the last quarter is.
Members of growth Workover and December was further gogo members of the sequential month over month growth in their minister you, specifically I think it will be key to see this particular month.
But of course this quarter is going to be.
Very unique one in the sense actor worsening of the order BBC.
You are putting or in fact reduction of small regain essentially because we mean when I'm out of the modems stop so thats, what we are in terms of.
The commercial vehicles.
Okay, and then sorry, just if I may squeeze in one more question and correct me if I'm wrong.
When we launched how do you had had it did not have an automatic option and these are substantially bookings I mean, ER docs and the bookings I mean, the bookings were drawn this time or try to drugs is launched without automatic wajid any specific reason for that.
I'm sorry, so very specific question, but you made.
Let it be specific there and also was a little bit bispecific as wants the heavier concern.
I don't like to make any for your long term to what is going to be because the next figure the old to export but please please stay with us.
I actually see that we deliver on our commitment or the enhancement of the product is going to be part of an active lifestyle. The management of the border. So therefore, there will be a heavier and you would actually be that this area actually tick. So all of the boxes in terms of the couple of egress raised at the point of to launch.
Second well related to growth same commitments as an actor lifecycle management.
Because of the concentration where we actually have to convert the prior range of order completeness will be used for no as of the fruit. So April for US actively launch on the 20 seconds of channel.
To be a six.
Yeah.
Actually strike a balance.
Between the our capacity for all of the required.
Operation activities to be before.
And what to launch in the first is Bose.
But all of this.
Balances to be taken.
Well, we'll actually be it's when your transmission.
The launch.
Total shortly after by an automatic transmission.
In order to complete the product family and meeting the couple of expectation.
He is it's the they're taking this call for the reason mentioned, but also for the reason or the in the segment the onto the computing.
The current equivalent of the option of an automatic transmission or may be activity or the DCP is.
It's going to exhibit to your first a 15% where we except for that.
A recent the percentage of option taken or which allows us to actually stretch should the launch of the different variables or a couple of months.
Sure. Thanks.
Okay.
Ladies and gentlemen that doesn't last question I now hand, the conference over to the management for closing comments.
Yes.
Thanks, a lot on appeal for though for your patience and listening to the all look forward to catching up in person on the auto exposure really.
And of course, the enlisted in us coming up on.
June 18 and of course catch you in the next quarter Melissa. Thank you.
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Ladies and gentlemen on behalf of him global financial.
This conference. Thank you for joining us and you may now disconnect your lines.
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