INDIA’S top vehicle maker Tata Motors on Thursday (August 11) posted a rise in quarterly sales but stagnant profits as rising raw material costs affected its bottom line.
The auto giant reported a consolidated net profit of $ 444 million (£272 million) in the three months to the end of June, up 0.6 per cent year-on-year.
Sales for the April-June period jumped 24 per cent to 333.91 billion rupees (£4.5 million), said the company, which owns British luxury car brands Jaguar and Land Rover.
Tata Motors, part of the salt to steel Tata conglomerate which manufactures utility vehicles and the ultra-low cost Nano car said cost pressures including commodity price rises resulted in lower operating margins.
Steel, rubber and aluminium prices, all important raw materials for cars have been rising and auto makers including Tata Motors and Maruti Suzuki have passed on the burden to buyers by raising vehicle prices in India.
The latest data includes sales of Jaguar and Land Rover vehicles.
The luxury unit reported a fall in net profit of 3.09 per cent. Sales of vehicles touched 62,090 units – up five per cent year on year.
Indian car sales slid almost 16 per cent in July from a year ago, their biggest drop in nearly three years as steeper borrowing costs kept buyers out of the showrooms, industry data showed.
Indian car sales which are viewed as a barometer of overall economic health plunged to 133,747 units from 158,767 in the same month last year.
Last month India's top passenger car maker Maruti Suzuki showed a surprise 18 per cent jump in quarterly net profit to $ 124 million (£76 million) but warned of sluggish sales as higher interest rates crimp consumer borrowing.