Tata Motors is India’s largest automobile company, with consolidated net profit of 9,274 crore (US$2.07 billion) in 2010–11. It is the leader in commercial vehicles and among the top three in passenger vehicles. Tata Motors has products in the compact, midsize car and utility vehicle segments. The company is the world's fourth largest truck manufacturer, the world's second largest bus manufacturer, and employs 50,000 workers.[3] Since first rolled out in 1954, Tata Motors has produced and sold over 4 million vehicles in India.
Established in 1945, when the company began manufacturing locomotives, the company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969.[5] Tata Motors is a dual-listed company traded on both the Bombay Stock Exchange, as well as on the New York Stock Exchange. Tata Motors in 2005, was ranked among the top 10 corporations in India with an annual revenue exceeding INR 320 billion. In 2010, Tata Motors surpassed Reliance to win the coveted title of 'India's most valuable brand' in an annual survey conducted by Brand Finance and The Economic Times.[6]
Tata Motors has auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad and Pune in India, as well as in Argentina, South Africa, Thailand and the United Kingdom.
JLR keeps the moolah flowing at Tata Motors
For Tata Motors, hope comes from its European subsidiary Jaguar Land Rover (JLR).
The British luxury car maker reported a healthy wholesale volume growth of 31% during August, with major thrust coming from its new launches and strong demand from China.
JLR’s August global sales grew 31% year on year to 21,242 units, driven by Land Rover sales at 17,833 units (up 43%), while Jaguar sales at 3,409 units declined 10% for the same period.
According to analysts, strong focus on emerging markets such as China and newly launched Evoque will drive volumes for the company. To boost its presence in the Chinese market, Tata Motors is currently scouting for a partner in that country. On the other hand, North America and Europe, which contribute around 22% of company’s overall sales, are currently witnessing moderation in demand due to economic slowdown.
“We believe that the OEM is better positioned to withstand the downturn in this current cycle given that: I) Range Rover’Evoque’ will create a new segment for Land Rover (the product has 18,000 pre bookings already) ii) China accounts for 15% of volumes (as compared to 5% earlier) and is likely to witness healthy growth over the near term,” wrote JP Morgan analysts Aditya Makharia and Ritesh Gupta wrote in their research report on Thursday.
“The new Jaguar XF is likely to double the addressable market as this will be the first Jaguar with CO2 emissions below 150g/km, a crucial cut-off point for fleet buyers.
Evoque, which is the smallest and the most fuel-efficient Range Rover, will make Range Rover affordable for a larger market. The initial response to Evoque has been very strong,” wrote Amit Mishra and Priya Ranjan in a recent Macquarie report.
JLR’s other German competitors, Audi, BMW and Mercedes also reported healthy growth globally during August. Audi grew 17%, while BMW and Mercedes Benz grew 8%, respectively.
A concern over JLR’s sales was raised when recently company’s chief, Carl-Peter Forster, resigned on an immediate basis citing “unavoidable personal circumstances”. The announcement, which comes just 18 months after the German executive joined the Indian company, has raised eyebrows. Forster helped the JLR unit turn profitable.
However, Tata Motors said that Forster resignation will not have an impact. According to a news agency report, Tata Motors said the sudden exit of Carl-Peter Forster will not impact the future of JLR, stating that “it would be wrong to credit” the former executive for turning around the British marquee.
Where company’s commercial vehicle demand remained robust, its passenger vehicle division decelerated. “Tata Motors management expressed concerns on demand in the domestic PV segment, where its market share has reduced to 10- 12% from 16-17%. This segment has also been highly impacted by interest rate hikes,” said Jamshed Dadabhoy, in a Citi report on September 15.
He said, “In order to revive sales, the company plans to increase brand publicity and promotion while expanding the dealership network in the short term. Over the longer term, the management aims to increase frequency of new model launches, enter new segments and improve overall product quality. “
As far as capex is concerned, the company is taking slow steps to understand market sentiments. The management believes that the domestic CV business has been underinvested in the past and has thus increased capex. While expecting the capex to be funded through internal accruals, the management could curtail capital expenditure if macro environment deteriorates further,” wrote Dadabhoy.
Tata Motors Filed 3% Hike in Global Sales for August 2011
The native automaker Tata Motors reveled the descent success of the company and stated that its global sales increased by 3% to 87,459 units in August 2011 as against to the corresponding month of last year.
Even the luxury auto brand Jaguar Land Rover owned by Tata Motors posted 31% growth with 21,242 unit sales in August 2011, as mentioned by the domestic automobile manufacturer. On the contrary, sales of luxury sedans from Jaguar brand diminished by 10% to 3,409 units in same month of August 2011 but Land Rover sales raised by 43% with 17,833 vehicle sales.
As per details, the total passenger vehicle sales of Tata Motors dropped by 35% with only 18,194 unit sales in August 2011 as compared to same month of last year. Brand’s commercial vehicle sales grew by 17% to 48,023 units in comparison to same month of last year.
Tata Motors Group sales enhanced last month and it comprises of Tata, Tata Daewoo and Hispano Carrocera range of commercial vehicles, Tata passenger vehicles, along with locally distributed brands Jaguar and Land Rover
The stock underwent a great selling pressure on the Sensex when there were rumors circulating about its falling sales figures for the passenger vehicles segment both in the domestic as well as the foreign markets. To top it all, the global slowdown had also reduced the pace of growth in the luxury car segment of the Jaguar & Land Rover units.
The other bad news that came about was the resignation of the company’s CEO, Carl Peter Forster and it had further dampened the market and trade volumes of the stock due to unhealthy sentiments flowing around.
Analysts are of the v iew that the markets have well factored the near term concerns about the company and do not see any significant fall in the stock prices in the coming times.
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