Strong sales of Jaguar and Land Rover vehicles helped Indian parent Tata Motors triple its first-quarter net profit, more than making up for a drop in domestic sales.
India’s biggest automaker by revenue bought British carmaker Jaguar Land Rover (JLR) in 2008, and it has been propping up profits at Tata for the past few years – helped by strong sales growth in China, the world’s biggest auto market.
Jaguar’s and Land Rover’s retail sales in the April-June quarter rose 22 percent to 115,596 units from a year ago, while sales of its domestic trucks, buses and passenger vehicles declined by 28 percent to 110,612 units.
Tata Motors, part of the $100 billion Tata conglomerate, said consolidated net profit rose to 53.98 billion rupees ($882.31 million), the highest in nine quarters, compared with 17.26 billion rupees a year ago.
While Tata dominates the trucks and buses segment in India, its passenger cars have failed to lure customers away from local rival Maruti Suzuki Ltd and foreign competitors including Hyundai Motor Co and Honda Motor Co.
The company has struggled to banish an image that its cars are not cool because they are used as taxis and also due to the legacy of its ultra-cheap Nano, perceived as a poor man’s car.
Tata will launch a new car in India on Tuesday, its first new offering in four years, in a bid to regain market share and plug losses in its domestic business, which has also been hit by an economy that is battling its longest spell of below-5 percent growth in a quarter of a century.
India’s car industry is expected to grow by 5 to 10 percent this fiscal year, which started on April 1, an industry body said this month, as the new Narendra Modi-led government works to revive stalled reforms and boost consumer confidence.