Jaguar Land Rover boosts Tata Mo­tors’ profit

The Gulf Today - Business - - REGION -

MUM­BAI: In­dia’s Tata Mo­tors re­ported a sharp rise in sec­ond quar­ter profit, helped by higher sales of its Jaguar and Land Rover cars, but warned of chal­lenges ahead for its flag­ship Bri­tish sub­sidiary.

Guenter Butschek, Tata Mo­tors, CEO and Manag­ing Di­rec­tor, spoke dur­ing a press con­fer­ence an­nounc­ing the com­pany’s quar­terly re­sults in Mum­bai. Jaguar Land Rover (JLR), which has been driv­ing Tata Mo­tors’ prof­its for sev­eral years, ex­pects sales in the UK and United States to soften be­cause of com­pe­ti­tion but is con­fi­dent of growth in China, JLR CEO Ralf Speth said dur­ing the con­fer­ence.

“We know that over­all the economies are stronger around the world but it’s also clear that we see, one or the other, weak­ness from a po­lit­i­cal side, from an econ­omy side. Think about Brexit, think about the US at the cur­rent mo­ment,” Speth said.

JLR plans to launch sev­eral new prod­ucts next year in­clud­ing the Jaguar XF Sport­brake sportu­til­ity ve­hi­cle (SUV), the E-pace, a com­pact SUV, and the I-pace, its first elec­tric sports car, Speth said af­ter the com­pany an­nounced a three-fold rise in profit.

Tata Mo­tors’ con­sol­i­dated net profit for the quar­ter ended Sept.30 rose to 24.83 bil­lion ru­pees ($382 mil­lion) com­pared with 8.28 bil­lion ru­pees a year ago, helped by strong de­mand for Range Rover Ve­lar and other new mod­els. An­a­lysts on av­er­age had ex­pected a net profit of 14.99 bil­lion ru­pees, ac­cord­ing to Thom­son Reuters data.

Pre-tax profit at JLR rose 38 per cent to 385 mil­lion pounds ($505 mil­lion) and its mar­gin on earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA) rose to 11.8 per cent from 10.9 per cent a year ago.

Re­tail sales of its Jaguar sa­loons and Land Rover sport-util­ity ve­hi­cles were up 5 per cent on the same quar­ter last year, as an in­crease in sales in China helped off­set lower UK sales.

JLR, Britain’s big­gest car­maker, has said it is al­ready feel­ing the first ef­fects of Brexit, with EU cit­i­zens from out­side the UK de­mand­ing more se­cure em­ploy­ment con­tracts and in­ter­na­tional sup­pli­ers less will­ing to com­mit to in­vest­ing in the coun­try.

While JLR will spend be­tween 4 and 4.5 bil­lion pounds on cap­i­tal ex­pen­di­ture this year, go­ing for­ward it will ex­pand its prod­uct port­fo­lio in a very con­trolled man­ner to en­sure sus­tain­able, prof­itable growth, Speth said.

Sec­ond-quar­ter losses at Tata Mo­tors’ do­mes­tic busi­ness nar­rowed to 2.95 bil­lion ru­pees from 6.31 bil­lion ru­pees a year ago, helped by a 30 per cent jump in rev­enues.

Reuters

Guenter Butschek speaks dur­ing Tata Mo­tors’ press con­fer­ence in Mum­bai.

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