Strong Jaguar Land Rover sales shore up loss-making parent Tata Motors
British subsidiary’s sales and revenues up 40% to £4.6bn
Managing director of Tata Motors Karl Slym: flagged importance of trucks to the automaker’s future. Photograph: Danish Siddiqui/Reuters
Soaring sales and stellar margins at British carmaker Jaguar Land Rover yet again propped up the finances of its Indian parent Tata Motors, as economic malaise and waning industrial activity at home hit the company’s truck business.
The Indian automotive group beat expectations in the quarter ended in September, with net profits up 71 per cent to Rs35.4 billion ($565 million), well above analyst forecasts of Rs25.5 billion.
The luxury British business, which Tata acquired in 2008, accounted for all the upside as the launch of a new Range Rover model and the Range Rover Sport spurred sales and helped operating margins rise to 17.8 per cent, far above those at rivals such as Mercedes-Benz or BMW. The Indian operations reported a fourth consecutive quarterly loss.
“The big change for the country’s economy and which therefore makes a big change for our business is in medium and heavy-duty trucks,” said Karl Slym yesterday, Tata Motors managing director .
In the Indian market, where Tata sells cheap hatchbacks and SUVs and is the largest truck and bus manufacturer by sales, the company reported a net loss after paying tax of Rs8 billion in the quarter.
Mr Slym said a pick-up in sentiment will first boost passenger car sales. Truck owners are facing a situation where they have 40 per cent idle capacity, and that will be filled before new vehicles are required.
JLR’s huge growth in sales and revenue, up 40 per cent to £4.6 billion during the quarter, has become one of the UK’s most celebrated manufacturing successes over the past few years, and led a renaissance of the country’s once bankrupt and battered car industry. – Copyright The Financial Times Limited 2013