Jaguar Land Rover’s parent company, Tata Motors Ltd., based in Mumbai, reported a quarterly profit that fell short of expectations due to a broader consumption slowdown in India, impacting both car and commercial vehicle sales. For the three months ending December 31, net income decreased by 22% to 54.51 billion rupees ($630 million), missing the average analyst forecast of 64.35 billion rupees. Revenue increased by 2.7% to 1.14 trillion rupees, but also fell slightly below analyst predictions. The commercial vehicle segment experienced an 8.5% decline in revenue, while passenger vehicle sales dipped by 3.9%. Total costs rose by 3.8% to 1.08 trillion rupees.
This disappointing performance underscores the ongoing challenges posed by a consumer slowdown in India, characterized by declining wage growth and high inflation. Additionally, Tata Motors is grappling with economic difficulties in China, where weak demand and a shift towards electric vehicles are affecting sales of traditional luxury cars. The company noted in its filing that it is closely monitoring the overall demand situation, especially in China.
Meanwhile, Jaguar Land Rover’s pretax net profit fell by 17% to GBP523 million ($649 million). Maruti Suzuki India Ltd., the country’s largest car manufacturer, also reported a profit miss earlier on the same day, impacted by rising input costs primarily due to the sharp depreciation of the rupee against the US dollar, which has made raw material imports more expensive. Maruti Suzuki recently launched its first electric vehicle as competition heats up in a segment that has largely been led by Tata Motors.
