Tata Motors’ Net Profit Grows Three Fold With Increased Sales of Jaguar Land Rover In China

Tata Motors Limited, a subsidiary of Tata Group and India’s largest automobile manufacturer has increased its quarterly profit by three folds. The profit increase takes place following a strong boost in sale of luxury British unit Jaguar Land Rover accompanied by an unexpected insurance payment. The Mumbai based car manufacturer has revealed different aspects of its business while representing the quarterly earning report on May 30.  

The Jaguar manufacturer has recorded a consolidated net profit of INR 51.8 billion ($771 million) during the fiscal quarter ended on March. The net profit has jumped from INR 17.2 billion posted a year back. However, the net earning figure remains well above the projection made by 25 analysts in a consensus poll conducted by Bloomberg News. Analysts’ have predicted for a net profit of INR 35.3 billion for the fourth quarter, reports Channel NewsAsia.

Jaguar Land Rover has appeared as the worst victim of China’s economic slowdown during last year’s auto world. But now the British luxury car brand and its owner, Tata Motors have made a magical turnaround with returning back of Chinese economy. Following the publication of quarterly earning report, share prices of Tata Motors have been increased by 8% on May 31, according to a report published in The Wall Street Journal.

Profit of Jaguar Land Rover is immensely dependent on Chinese market historically. Its retail sales in Chinese market have increased 19% during the March quarter compared to the same period of the previous year.

Equity income from Jaguar’s Chinese joint venture with state owned Chery Automobile has grown double compared to the previous quarter. Meanwhile Jaguar is going to initiate local production which is expected to reduce production cost and avoid import duties. These initiatives are believed to further boost up Jaguar sales in Chinese market.  

In addition to increased Chinese sales, Tata Motors is also enjoying the ever growing domestic demand for its trucks. However, the Indian auto manufacturer is forced to recall some 100,000 Jaguar Land Rover cars in the US to fix a fault with the airbags made by Japan's Takata. It has already settled claims for £166 million in connection with resolving the dispute, reports BBC.

Intriguingly, Tata Motors has received insurance payout quite unexpectedly as compensation for an explosion at the Jaguar Land Rover Plant at Tianjin of China during last summer. Tata has lost 5,800 cars in that explosion. The largest car manufacturer in India has acquired Jaguar Land Rover from Ford during 2008 for $2.3 billion (£1.6 billion).