Jaguar Land Rover sales dip adds pressure on parent Tata
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Sales of the F-Type sports car begin next year, promising to boost Jaguar's prospects amid a global slowdown. |
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MUMBAI, India (Bloomberg) -- Tata Motors Ltd. said sales at its Jaguar Land Rover unit fell 4.3 percent in September, the first decline in 14 months, as a slowing global economy sapped demand for luxury vehicles.
Deliveries of Jaguar cars and Land Rover SUVs dropped to 26,461 last month from 27,639 a year earlier, Tata said in a statement.
It was the first decline since July 2011, and missed the 30,000 median estimate of 20 analysts surveyed by Bloomberg News.
Slowing sales at the luxury unit, which accounted for 72 percent of Tata Motors' revenue in the three months ended June, adds pressure on Chairman Ratan Tata, who is trying to revive flagging demand at the company's Indian business.
Tata Motors' local unit sales, including exports, declined 4 percent to 75,773 vehicles in September, the company said Oct. 1.
"If this decline is a start of a new trend, then Tata Motors will be very worried as JLR has been a cash cow for them," said Deepesh Rathore, the New Delhi-based managing director of IHS Automotive in India. "It doesn't look rosy for all the carmakers right now and JLR will need new models as they've been relying too much on the Evoque."
In the United States, a bright spot in the global economy, Jaguar Land Rover sales rose 21 percent last month and have advanced 18 percent for the year. Jaguar's U.S. sales are up 3 percent this year while Land Rover deliveries have climbed 24 percent.
Jaguar Land Rover, which will begin deliveries of the Jaguar F-Type sportscar and a new Range Rover SUV next year, plans to invest 2 billion pounds ($3.2 billion) this year to develop models and expand factories.
Deliveries of Jaguar cars fell 49 percent to 2,808 units, the steepest monthly drop since Tata Motors started reporting data in December 2009, while Land Rover SUV sales increased 7 percent last month, the slowest pace of growth in 21 months.
Evoque
The Evoque, the hit model that has a special edition styled by former Spice Girls singer Victoria Beckham, went on sale in September last year and accounted for more than 37 percent of Land Rover-brand sales in the quarter ended June 30.
"September is usually a good month for U.K. sales, so these numbers are below our expectations," said Umesh Karne, an analyst at Brics Securities Ltd. in Mumbai. "Going forward, sales will be under pressure until the new Range Rover deliveries begin."
The world economy will grow 3.3 percent this year, the slowest since the 2009 recession, and 3.6 percent next year, the International Monetary Fund said Oct. 9. The Washington-based lender cut global growth forecasts as the euro area's debt crisis intensifies.
Eliminate jobs
Companies have reduced costs and eliminated jobs to weather the downturn in Europe. The euro-area unemployment rate reached a record 11.4 percent in June and held at that level through August.
India's automakers' association lowered its full-year domestic car sales growth forecast on Oct. 10 for the second time in four months to as low as 1 percent as slowing economic growth and high interest rates keep buyers from showrooms.
The luxury unit said Sept. 21 that it received a nod from China's main industry planner to form a venture with Chery Automobile Co. and begin making cars in the world's biggest auto market.
China's government requires overseas automakers to work with Chinese companies to produce domestically and avoid the nation's 25 percent import duty.
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