Tata Motors income in the 2nd quarter increased by 71% thanks to Jaguar, Land Rover

Article by Christian Andrei, on November 12, 2013

As sales of Jaguar Land Rover unit grew quickly, Tata Motors was able to raise its income in the second quarter by 71% to 35.4 billion rupees ($564 million). Tata Motors said that the profit of Jaguar Land Rover increased by 66% to 507 million pounds ($815 million) in this quarter. The strong demand for Jaguar models, such as the F-Type convertible that started deliveries in May, drove up retail sales to increase at its quickest pace in four quarters.

Tata Motors started selling the latest Range Rover Sport in several markets like the U.K. and China and intends to introduce the model in more markets. Mahantesh Sabarad, an analyst at Fortune Financial Services India Ltd. in Mumbai, said that JLR is “driving more than 100% of the profit” while the parent is incurring losses.

He said that the growth rate is expected to become moderate to around 12% to 14% in the next two years. Jaguar Land Rover, which Tata Motors acquired from Ford Motor Co. in 2008, made up 88% of Tata Motors' operating profit in the year that ended March. Tata Motors, which is included in the $100 billion Tata conglomerate, has become reliant on its U.K. unit to support profits.

Tata's passenger and commercial vehicle sales struggles in India amid high interest rates and fuel prices in an economy increasing at its slowest pace in 10 years. Tata Nano sales have fallen considerably below expectations and since 2010, there hasn’t been an all-new Tata-branded passenger vehicle.

Jaguar Land Rover has stayed afloat due to the demand for its Jaguar XF and XJ sedans and Range Rover SUVs, specifically in China. In the quarter, retail sales of Jaguar Land Rover grew by 21% to 102,644 units. Jaguar’s deliveries rose by 57% to 20,024 units, while Land Rover sales climbed 15% to 82,620 vehicles.

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