Jaguar Land Rover brought a setback to the parent Tata Motors as it witnessed a dip in its sales for the first time since July 2011. Luxury Vehicles account to an overall 90 per cent of the group's overall profit and the reduction in their sales is certainly a point for Tata to think over.
JLR's sales had significantly grown over the past year which was mainly driven by the new Evoque model and its huge success in neighbouring China and other emerging markets. This had also led Tata's stock price to shoot up by 50 per cent, despite the fact that the company failed to lure a good number of buyers in the domestic market.
The British brand, JLR's sales decreased by 4 per cent in September, when compared to the same period last year. The company had earlier, in August reported that its sales was 13 per cent up, which was still lower than the 40 per cent increase in the previous three months.
"These numbers are not good. This is below consensus expectations and so the stock is likely to be affected negatively,” said Jinesh Gandhi, automotive analyst at Motilal Oswal Securities in Mumbai.
Tata had bought JLR for $ 2.3 billion in 2008 and it had since then reduced the effect of slowing sales in domestic market of Tata's own cars and trucks where cooling economic growth accompanied by high interest rates has largely affected the demands.
JLR had accounted for about 70 per cent of Tata's overall revenue in the in the April-June quarter and around 90 per cent of company's profit.
With the decrease in the sales of Jaguar Land Rover, Tata Motors' stock is likely to be hit, which is a point of concern for the auto maker.
