Road to profit: Land Rover Freelander on the assembly line at the Jaguar-Land Rover plant in India
INDIA’S top vehicle maker Tata Motors on Thursday (August 9) posted a 12.2 per cent rise in quarterly profit, but missed forecasts, even as strong sales of British brands Jaguar and Land Rover offset weak local demand.
The auto giant reported consolidated net profit of `22.44bn (£260m/$406m) for the three months to June, up from `20bn a year earlier.
The company, part of the salt-to-steel Tata conglomerate, however undershot analysts’ expectations of profit of around `27bn.
Revenues for the first financial quarter climbed 30 per cent to `431.7bn (£5bn/$8bn), the firm said.
Tata Motors, which also makes utility vehicles and the low-cost Nano car, said it suffered a foreign-exchange loss of `4.41bn in the quarter, around eight times more than the size of its currency loss of `570m (£6.60m/$10m)a year earlier.
Jaguar and Land Rover have been key growth drivers for the Indian firm in recent quarters, where car sales are slowing due to a rise in raw material costs, vehicle prices, high fuel prices and interest rates.
Tata Motors car sales in India slid 9.9 per cent from a year earlier to 62,619 units and its profit from standalone local operations nearly halved to `2.05bn, in the June-ended quarter.
The company said slowing local industrial growth, weak growth outlook and concerns over deregulation of government-controlled diesel prices will have an impact on overall demand for cars in India, in a presentation to reporters.
Tata Motors bought Jaguar and Land Rover from Ford Motor in 2008 for $2.3bn as part of plans to expand its reach beyond Asia.
The deal vaulted Tata Motors from a commercial vehicle and small-car maker into a global player with luxury brands in its range of offerings.
Jaguar and Land Rover (JLR) sold 83,452 units in the last quarter, a jump of 34.4 per cent from a year earlier.
Net revenue for the JLR brands rose 34.6 per cent to £3.63bn ($5.64bn) and net profit jumped to £236m.
The demand for JLR’s luxury cars is strong in markets of north America, Russia and Brazil but demand in Europe remains weak.
“No one can predict what will happen in Europe,” Ralf Speth, Jaguar Land Rover’s chief executive told reporters on Thursday (August 9).
JLR has outlined a spend of £2bn in the financial fiscal year towards product development and increase in capacities, Speth said.
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