Jaguar Land Rover sales set to bolster Tata Motors as Indian market stagnates

JAGUAR Land Rover parent Tata Motors is expected to announce that sales of the luxury British brands are helping to sustain the business as subdued sales of commercial vehicles in India dent the company’s performance.

Analysts in India commenting ahead of Tata’s Q4 announcement said the firm faced difficulties because of a continuing slump in its major domestic market.

However, they also predict that the continuing strong showing by JLR globally will help to improve margins.

Strong demand for the new Range Rover across all markets plus the continued success of the Evoque and Jaguar XF is helping to bolster the parent in a way few could have foreseen when it decided to purchase the twin brands from Ford in 2008.

Predictions suggest that Tata’s consolidated net profit could decline by as much as 50% year-on-year but a one-off tax writeback of £166m for JLR is expected to cushion the overall results.

JLR is predicted to report a net profit of around £400m, with revenue rising to almost £5bn. BBITDA is likely to grow and demand for vehicles at the higher end of the market is likely to improve margins.

However, some analysts have injected a note of caution saying because the higher sales have been recorded against lower margin product such as the Evoque and Freelander then the results may not be as good as expected. Investment in new production facilities at Solihull’s Lode Lane plant and the new £750m engine plant at the i54 site near Wolverhampton may also impact overall results.