Tata Motors slumped 10%, the biggest drop since May in Mumbai trading, as three quarters of its profit came from Jaguar Land Rover.
Tata’s Jaguar Land Rover unit said that profit growth probably stalled due to the currency shifts and also the fact that cheaper models attracted a higher share of customers. BNP Paribas SA said it has cut its rating on Tata due to the negative outlook on JLR’s profitability.
“We had indicated at the beginning of the year that product mix would be poorer because of higher sales of the XF, Freelander and Evoque,” Vijay Somaiya, the head of treasury and investor relations at Tata Motors, said on a conference call today. “Incentives in the current year are also slightly higher than previous years.”
Somaiya added that the average selling price for the company’s best-selling models such as the Jaguar XF, Evoque and Land Rover Freelander is around 30,000 pounds ($47,500), down from 42,000 pounds for other models. As the low priced Evoque SUV accounted for around 30% of Land Rover’s wholesale deliveries during the six months ended September 30th, the company saw its margins fall in the two earlier quarters. The company began delivering the Evoque in September 2011 and it sells a little under 30,000 pounds, compared with 38,825 pounds as the starting price for the Land Rover Discovery 4 SUV.
by Ana Cezara Savin
) - Thursday, January 24th, 2013 - filed under Jaguar
, Land Rover
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