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        Jaguar Land Rover helps Tata Motors stay profitable

        CarTrade Editorial Team

        CarTrade Editorial Team

        Tata Motors has been experiencing a massive shortfall in vehicle sales since the past 6 months. However, the company managed to post a better-than-expected performance in the March quarter, thanks to robust sell of its Jaguar Land Rovers, which has emerged quite popular in the Chinese market.

        Similar to the company's performance in December 2012, strong sales for Jaguar Land Rover resulted in Tata Motors’ net revenue going up by 10 per cent to Rs.56,001.6 crore, as compared to the figures witnessed a year ago. High demand for Jaguar Land Rover products, a mixture of utility vehicles with high operating profits and exchange gains, were able to offset the weak domestic demand for medium and heavy commercial vehicles. However, sales of light commercial vehicles for Tata Motors were able to witness growth of 2 per cent during FY 2012-13.

        With the help of improved raw material/sales ratio, operating margins for Jaguar Land Rover were able to register decent growth. The Jaguar Land Rover operating margin of 16.9 per cent was higher than Wall Street's expectation of 15.5 per cent. Interestingly, Jaguar Land Rover results went ahead of the Bloomberg and StarMine estimates on different counts.

        As per industry experts, the business environment for commercial vehicles continues to look challenging in the country. Ravi Pisharody, Head of Tata’s Commercial Vehicle business said that though the company was being able to consolidate its position in the medium and heavy commercial vehicles space, the demand does not appear to be picking up soon. Due to the tough scenario, Pisharody explained that competition will encourage high marketing expenditure for Tata Motors

        Jaguar Land Rover would be looking to launch eight new models during 2013. Globally, the company’s sales for the year ended March 31 went up by 22 percent to end at 3,74,669 units. China was the best performing market for Jaguar Land Rover, where sales in the previous year went up by 48 percent, to 77,075 units.

        Looking at the figures, it is clear that sales at Tata Motors will be led by the Jaguar Land Rover, at least until the demand for passenger and commercial vehicles picks up in the domestic market. Auto experts feel that growth in the commercial vehicle and passenger car categories will only show signs of improvement by the second part of FY 2013. Tata Motors would be announcing new launches and variants later this year, as refreshed versions of the Nano with new engines are expected to be seen by end of June 2013.