As the demand for luxury cars declined, so did the profit of Tata Motors (which owns Jaguar Land Rover). In fact, it didn’t meet analysts’ estimates. In the quarter ended June 30, Tata Motors’ net income increased by 12% to 22.45 billion rupees ($407 million). In a statement last Thursday, the Mumbai-based company said that it failed to meet the 27.3 billion rupee median of 35 analyst estimates that Bloomberg put together.
Jaguar Land Rover reported a profit of 236 million pounds ($369 million), which is 22% below the median estimate. These results may lead to concern that demand for Jaguar vehicles is declining as Europe's sovereign-debt crisis is ongoing and China’s economy slows down.
Jaguar Land Rover’s sales increased by 34% to 83,452 vehicles in the last quarter. From this figure, Jaguar sold 11,774 of its vehicles while Land Rover accounted for 71,678 units. Sales in the first quarter climbed by 48%.
In June, Jaguar’s sales fell for the first time in seven months. Meanwhile, deliveries of Land Rover sport utility vehicles (except for the sold-out Evoque) decreased for a third month, CLSA Asia-Pacific Markets revealed.
After sales growth slowed last quarter, Jaguar Land Rover CEO Ralf Speth faced pressure to give Jaguar's aging designs an overhaul and to raise the appeal of Land Rover to more than just its Evoque model.
Basudeb Banerjee, an analyst with Quant Broking Pvt in Mumbai, said that the uncertainty in Europe has resulted to the sluggish sales of JLR cars. He thinks that there may be a “lacklustre” performance next quarter. He pointed out further that the third quarter is “crucial.”