Tata Motors said its first quarter consolidated profit fell 49 percent to 2,769 crore rupees compared with 5,398 crore in the year ago period.
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Economic growth in China, the world’s biggest auto market, has slowed to a 25 year low and a drop in consumer confidence is hurting sales of automakers from BMW to General Motors.
Jaguar Land Rover’s sales decline this quarter is even more pronounced as it has come despite the availability of its locally built Range Rover Evoque in China. He did not elaborate on the extent of cuts. However, that was partially offset by strong revenue growth in standalone business on continued medium & heavy commercial vehicle (MHCV) growth.
The revenues (net of excise) for the quarter stood at Rs 9,297 crore, as compared to Rs 7,705 crore for the corresponding quarter of the previous year.
JLR’s sales in China fell by a third to 21,920 vehicles during the quarter, pulling down total sales at the luxury carmaker by 1% to 114,905. China’s luxury vehicle market accounts for 20 percent of JLR sales.
The group has three plants in the UK, including Halewood which makes the Land Rover Discovery Sport and Range Rover Evoque. China’s share of global sales of JLR halved to 14 per cent.
Tata Motors Finance Ltd, the company’s captive financing subsidiary, recorded consolidated net revenue from operations of Rs890 crore and a net profit of Rs91 crore for the quarter ended 30 June 2015. The unit sees profit margins narrowing in the year through March 2016, compared with the previous 12-month period as demand wanes in China. Furthermore, the Discovery Sport performed well, already outselling the Freelander which it replaced. Jaguar sales volumes were down as the sales of XF and XJ fell ahead of the all-new lightweight XF and the refreshed XJ 16MY, on sale later this year, partially offset by the successful introduction of the new Jaguar XE. Just as Tata is about to announce its Q1 fiscal 2015 results, we take a look at what’s really weighing down the company’s performance in recent times, and has invoked enough investor discontentment to cause an nearly 40% decline in the stock price in the last six months.
Tata Motors shares today ended at Rs 392.55 apiece on the BSE, up 2.52 percent from the previous close.
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Analysts said Tata Motors’s earnings were in line with expectations.
