Shares in Indian automaker Tata Motors plunged as much as 30% in Mumbai last week after it reported the biggest quarterly loss in Indian corporate history, caused almost entirely by troubles at its Jaguar Land Rover (JLR) subsidiary.

Tata Motors announced a third quarter loss of Rs 269.93bn ($3.8bn), or more than half its current market capitalisation of $6.1bn, after being forced to register a £3.1bn ($4bn) impairment charge for its luxury British vehicle business, Reuters reported.

JLR, which Tata Motors acquired from Ford in 2008, has suffered from a slump in sales in China, a very important market for the company where ongoing trade tensions with the US caused car sales to fall last year for the first time in two decades.

The firm also has been hit by falling demand for diesel vehicles in Europe and uncertainty about the consequences of Brexit, the moment when the UK leaves the European Union at the end of March – a major concern given JLR manufactures exclusively in the UK.

Its travails have had a particularly hard impact on Tata Motors because JLR had accounted for 80% of its operating profits, and executives at the Indian parent company were keen to emphasis measures already underway to turn around JLR’s fortunes.

“We are now taking clear and decisive action in JLR to step up its competitiveness, reduce costs and improve cash flows and make the business fit for the future,” said PB Balaji, chief financial officer at Tata Motors, in a conference call to reporters.

He said JLR has taken steps to address the slide in sales in China by changing its strategy to focus on profits for dealers instead of sales and incentivising retail sales over wholesale.

“We see a gradual improvement in China going forward. We are happy to see our numbers stabilise now in terms of off take,” Balaji added.

Felix Brautigam, JLR’s chief commercial officer, also expressed confidence about demand for its refreshed Range Rover and Range Rover Sport marques.

“With deliveries of the new Evoque due to start later this quarter, we look forward to building momentum,” he added.

Sourced from Reuters; additional content by WARC staff