India Watch : Tata Motors’ profit triples as Jaguar sales climb in China
Automotive News Europe/Bloomberg, 11th February, 2011
MUMBAI (Bloomberg) – Tata Motors Limited, the owner of Jaguar Land Rover, said third-quarter profit more than tripled as a global economic recovery and rising wealth in emerging markets boosted demand for luxury vehicles.
Net income rose to 24.2 billion rupees ($529 million) in the three months ended the 31st December, 2011, from 6.5 billion rupees a year earlier, the Indian automaker said in a statement Friday. That exceeded the 21.5 billion-rupee average of 22 analyst estimates compiled by Bloomberg. Sales gained 22 percent to 315 billion rupees.
Jaguar Land Rover posted a profit after tax of 275 million pounds ($440 million) in the quarter as sales climbed in China where Tata plans to start building the British brands. The revival in luxury vehicle demand has spurred BMW AG and Daimler AG to expand production and target record sales this year.
“The overall picture looks very good for Tata Motors,” said Juergen Maier, a Vienna-based Fund Manager for Raiffeisen Capital Management who helps manage about $1.3 billion in assets. “There is a huge demand for luxury cars and competitors like BMW and Mercedes Benz are unable to produce enough to meet demand.”
Jaguar sales gained almost 50 percent last year in China, while deliveries of Land Rover SUVs more than doubled, Tata Motors said in January. The automaker has said it will build the Land Rover in China and India as economic growth and rising incomes boost demand in the world’s two most-populous nations.
Tata Motors plans to annually invest as much as 1 billion pounds in JLR’s capital expenditure and product development, CFO C. Ramakrishnan said at a press conference in Mumbai. In India, Tata will spend as much as 30 billion rupees on its factories and products.
Jaguar anticipates sales growth of more than 10 percent in 2011, Adrian Hallmark, Brand Director, said last month. The luxury marque plans to expand its presence in China with 10 new dealers to take the number of outlets to 50, Hallmark said.
The Evoque, Land Rover’s smallest and cheapest vehicle, which will cost about $40,000 in the U.S. when it hits dealers in the fall, will help the brand increase sales in 2011 from last year’s 181,000 and should lead to a record in 2012 of more than 225,000, according to John Edwards, Land Rover’s Brand Director.
Sales of Tata passenger vehicles, including the world’s cheapest car Nano, increased 5 percent to 64,501 in the final quarter.
The Nano went on sale nationwide in India in January after lengthier warranties and easier financing helped sales rebound in December from a record low. Demand for the car, which costs as little as 137,555 rupees in New Delhi, surged to 5,784 units in December from 509 a month earlier after Tata began television advertisements, added more sales points and introduced a 99 rupee-a-month maintenance option.
The car’s sales had fallen on a month-on-month basis since July because of price increases and safety concerns following at least three fires. Tata may export the Nano to countries such as Thailand, Sri Lanka and Bangladesh as early as this year, CEO Carl-Peter Forster said last month.
[Source: Automotive News Europe/Bloomberg]
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