India's giant Tata Motors announced Tuesday it is closing its Spanish bus and coach manufacturing factory next month due to "huge losses" in a shrinking European market.
The shutdown of the Tata Hispano Motors Carrocera plant in Zaragoza, after it racked up accumulated losses of more than 60 million euros ($81 million) in the past five years, will mean the loss of 287 jobs.
Tata Motors, which owns Britain-based luxury marque Jaguar Land Rover, blamed the closure of the nearly 75-year-old firm on "economic and business factors".
"Despite strong investments, there has not been a positive result to reverse the challenging business situation and losses for the plant," Tata Motors said in a statement.
Tata Motors, part of India's steel-to-tea Tata conglomerate, said the plant's sales had been falling "primarily due to the worst-ever decline in the bus market" following the 2008 global financial crisis.
Furthermore, "all market evaluations do not predict any positive change in the near future... making the plant production unviable".
Tata Motors, India's largest vehicle-making company and one of the world's biggest bus and truck manufacturers, bought a 21-percent stake in Hispano Carrocera in 2005.
It lifted its holding to 100 percent in late 2009 and renamed the Spanish company Tata Hispano Motors Carrocera.
When Tata Motors first took a stake in the Spanish firm, Hispano Carrocera was one of Europe's leading bus and coach makers and had been making chassis for a variety of international brands since 1939.
The purchase gave Tata access to Hispano's design and technology.
But the global financial crisis led to a shrinking European market and Tata Hispano suffered "huge losses", Tata Motors said. Tata Hispano ended 2012 with a loss of more than 14 million euros.
Production at the plant would cease in October after fulfilling current orders, Tata Motors said.
Tata Motors said it had received a "proposal" from Spain's Benseny Group, which has metal engineering and industrial design interests, but stressed it was not a purchase offer.
It said the proposal was "being pursued to explore the possibility" of keeping the factory open, without elaborating.
Mumbai-based Tata Motors has been facing problems of its own.
The company reported first-quarter net profit fell 23 percent to 17.3 billion rupees ($275 million) from the same period a year earlier amid falling domestic sales.