Tata Motors net income vehicle sales drop

Tata Motors first-quarter profit missed analysts' estimates as the owner of Jaguar Land Rover reported sales of its passenger cars in India fell and Jaguar deliveries declined. Net income rose to Rs20 billion (Dh1.62 million) in the three months that ended on June 30 from Rs19.9 billion a year earlier, according to a statement from the Mumbai-based car manufacturer on Thursday. Profit lagged behind the Rs21.6 billion median of 32 analysts' estimates compiled by Bloomberg. Sales increased 24 per cent to Rs333.9 billion. Jaguar unit sales declined 27 per cent in the period from a year-earlier, while Tata Motors posted an 8.5 per cent drop in Indian passenger vehicle sales in the quarter as rising interest rates damped demand in a country where about 80 per cent of purchases are funded by loans. Article continues below The Jaguar Land Rover unit, bought by Tata Motors in 2008, is planning to introduce new vehicles to compete for a bigger share of the high-end segment. "The main issue in the earnings was the performance of Jaguar Land Rover," said Walter Rossini, who helps manage about $300 million (Dh1.1 billion) in Indian assets at Aletti Gestielle SGR SpA in Milan. "Probably the market overestimated the strength of Jaguar Land Rover on the basis of the performance of other luxury brands." Trailing BMW Sales of Jaguar and Land Rover vehicles rose 5 per cent in the quarter, compared with 15 per cent for BMW AG and 4.4 per cent for Daimler AG's Mercedes-Benz. Tata Motors shares declined as much as 4.4 per cent to Rs812, and were trading at Rs814.85 in Mumbai. The benchmark Sensitive Index of the Bombay Stock Exchange was little changed. The company's compact Range Rover Evoque, which goes on sale next month, has received about 18,000 bookings, Tata Motors said in the statement. The company plans to introduce a 2.2 litre, diesel Jaguar XF by the end of this year. "Everyone is looking at the Evoque and also at the product launches from Jaguar that will help increase sales," said Juergen Maier, who helps manage about $1.2 billion of emerging- market shares, including Indian stocks, at Raiffeisen Capital Management in Vienna. Jaguar, the 76-year-old British luxury-car brand, aims to challenge BMW with a hybrid supercar and an entry-level sedan to compete with the 3-Series. The new models are part of Tata's plans to invest £1.5 billion (Dh8.97 billion) annually in product development at Jaguar and sister brand Land Rover over the next five years. ‘Strong performances' "We continue to see strong performances in key markets such as China and Russia and very soon we will have some exceptional new product offerings," Ralf Speth, chief executive officer at Jaguar Land Rover, said. Tata Motors is turning to the British luxury brands, which it purchased from Ford Motor, for growth and to drive international ambitions. The Jaguar Land Rover unit, based in Gaydon, England, generated 57 per cent of Tata Motors' revenue for the year ended March 31, up from 53 per cent a year earlier.