Tata Motors loses over Jaguar Land Rover’s decrease in China image

Tata Motors took a tumble on the Chinese market in the context of decreasing sales across the board and a one-time incident-related expenditure, but has identified solutions to address the issue.

The Indian parent company for Jaguar Land Rover, Tata Motors Ltd, saw a sharp decrease in its Chinese sales, due to a conjunction of factors: a general market slowdown and the disastrous explosion on Tianjin port which destroyed company car stocks. Tata Motors announced that the net loss in the third quarter only amounted to 4.3 billion rupees ($65 million), a painful decline from the 32.9 billion rupees profit in September 2014. Jaguar Land Rover by itself took a 92 million pound ($139 million) blow, a 32 percent plunge in sales in China. On top of this, the Indian carmaker had to pick up the tab for damages amounting to 24.93 billion rupees, following the August blast at Tianjin port where 5,800 of its luxury vehicles were in storage.

The situation triggered a 1.9 percent slump in Tata Motors share price, to 396.15 rupees per unit on the Mumbai Stock Exchange, before the results were revealed. Nitesh Sharma, an analyst at PhillipCapital (India) Pvt., stated on Friday that “Overall the stark compression in margins at JLR spooked us as well as the street. Outlook on margins to be very critical for us to form a concrete view on the stock.” However, Tata Motors announced they have several aces up their sleeve, namely the new Jaguar XF and the locally produced Range Rover Evoque and Land Rover Discovery Sport, whose introduction on the China luxury car market is envisaged to cut the loses and boost sales again.

Via Bloomberg