Chinese car market to pip India in the revenue source for Tata Motors this fiscal

Wednesday 21 August 2013, 12:01 PM by

Amid slowdown in the Indian car market, auto makers based in the country are now resorting to expand their network across global markets. Nowadays, major car manufacturers are selling their vehicles in other markets so as to expand their revenues. The prominent example being of Tata Motors, which is expected to earn more revenues from China as compared to India during the current fiscal year.

It must be noted that Tata Motors had performed reasonably well in the Chinese car market, which accounted for a share of 23.6 per cent in its global revenue during the fiscal 2013. On other hand, the market share of India was slightly more at 23.9 per cent as told by the company, further giving an indication that how well China has contributed to company's fortune.

Commenting on the issue Ashvin Chotai, the Managing Director of Intelligence Automotive Asia said "This is a reflection of the sharp fall in Tata's core commercial vehicle and car sales in India and a surge in higher-priced luxury vehicles in China." Further adding to it, he said “In the first six months of this calendar year, Tata Motor's India sales have fallen by 25.4 per cent while its China sales have gone up by 16 per cent.”

Over the past three years, Jaguar Land Rover sales in China have registered an increase from 17,552 units to 77,144 units after the company strengthened its dealer network. According to the company, China has been a major contributor to sales revenues owing to the fact that marginality of profit is much greater in the country as compared to any other market. With the addition of Jaguar and Land Rover, it seems Tata Motors has been enjoying a larger chunk of pie in global markets where it once had a meagre share. This statement is evident from the fact in China, Tata Motors fared a 10 per cent share before launching Jaguar Land Rover brand and since after its inception the company has majorly contributed to the revenues of it.

Jaguar and Land Rover brand is fast expanding its customer base in China with models like Evoque and Freelander living up to the company's expectations. It is further said that Chinese people have a huge craving for Sports Utility Vehicles and nearly around 90 per cent sales of JLR attribute to these type of cars. Further throwing light on it, Bob Grace, President of Jaguar Land Rover China, said "Having maintained a double-digit growth thus far this year, we have full confidence in sustainably growing our business here."

He also told that the company is setting up its first production facility near Shanghai. The plant is expected to be be ready by 2014 and will have a annual produce of around 1 lakh vehicles. It will set up in collaboration with Chinese car maker named Chery. However, Jaguar and Land Rover still has a long way to go in the Chinese car market, which is dominated by the German triplet of BMW, Audi and Mercedes-Benz.

Apart from it, lesser known brands like Acura and Infiniti are also stemming up the challenge to Jaguar Land Rover. The company is still a small player in China but its has a huge potential to gain a sizeable market share. Its sales have grown at a rate of 16 per cent during the fist half of the year, while its competitor Audi registered a 13 per cent increase. According to analysts, Chinese car market will rank above India on the priority list and now with collaboration of Chery and Jaguar Land Rover in China, Tata Motors will also look in tapping through the automobile sector of the country.

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