Tata Motors, India’s biggest automaker by revenue, beat analyst estimates with its first quarterly profit gain in a year as sales at luxury unit Jaguar Land Rover got a lift from new models.
Tata Motors, part of the $100 billion Tata conglomerate, has become dependent on its U.K. unit to prop up profits. At home, passenger and commercial vehicle sales have suffered from an environment of high interest rates and fuel prices in an economy growing at its slowest pace in a decade. Sales of Tata’s Nano, dubbed the world’s cheapest car, are well below expectations and there has not been an all-new Tata-branded passenger vehicle since 2010.
JLR, on the other hand, has been riding on resilient demand for its Jaguar XF and XJ saloons and Range Rover sport-utility vehicles, especially in China. Net profit surged 71 % to 35.42 billion rupees ($566 million) in the fiscal second quarter ended September 30 from 20.75 billion rupees a year earlier, according to Tata. Revenue rose 31 % to 568.82 billion rupees.
Growth came “despite weak operating environment in the India business which was more than offset by increase in wholesale volumes and richer product and market mix at Jaguar Land Rover,” Tata said in a statement.
JLR is building its first manufacturing plant outside the United Kingdom in China, which analysts widely expect to surpass the United States as the biggest premium car market by the end of the decade. JLR also pitches its vehicles to a slightly lower, broader segment of the luxury market, helping it escape the brunt of a Chinese government crackdown on conspicuous spending that is affecting sales of rival marques such as Bentley and Lamborghini.