MUMBAI (Bloomberg) -- Tata Motors Ltd. quarterly profits plunged as demand for Jaguar Land Rover vehicles slumped in China amid a market slowdown.
Net income fell to 27.7 billion rupees ($434 million) in the quarter through June from 54 billion rupees a year earlier, the Mumbai-based company said.
Profit at the Jaguar Land Rover unit declined to 492 million pounds ($764 million) from 693 million pounds.
Jaguar Land Rover retail sales plunged 33 percent in China in the quarter, resulting in a 1 percent decline in worldwide deliveries. The luxury unit has cut its sales targets and prices in China as automakers from Toyota Motor Corp. to BMW AG warn about a slowdown in the world’s biggest auto market.
Tata Motors’ earnings were also hurt by a prolonged slump in sales of its light commercial vehicles in India.
The automaker’s revenue fell to 610.2 billion rupees from 646.8 billion rupees. Sales at the luxury unit declined to 5 billion pounds from 5.35 billion pounds.
JLR has cut prices, sales and production targets in China, a top executive said, as it struggles with high inventories in the slowing market.
"Production and sales targets (for JLR in China) have been adjusted to reflect the slowing market," Tata Motors finance chief C. Ramakrishnan said today on a conference call. He did not elaborate on the extent of cuts.
Tata Motors has also cut the price of JLR's locally-made Range Rover Evoque SUV by up to 6 percent, and lowered the launch price of its Jaguar XE compact sedan, he said, but did not give price details.
JLR should see a return to sales growth from the December quarter driven by new launches and as management improves brand awareness for the China-made Evoque, said auto analyst Nitesh Sharma at brokerage Phillip Capital.
Jaguar Land Rover has forecast sales will climb to a record of more than 500,000 vehicles this year, up from 462,678 units in 2014, helped by new models such as the entry-level Jaguar XE sedan and the Discovery Sport from Land Rover. Sales fell 0.5 percent to 239,212 units in the first half.
The automaker's net income of 27.7 million rupees trailed the 31.4 billion-rupee median of 31 analysts’ estimates compiled by Bloomberg.
Reuters contributed to this report.