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Industrial Products India, Industrial Manufacturers & Suppliers
 




 
   
 
 
 

Tata Motors: All eyes on Evoque....

Tata Motors: All eyes on Evoque


Passenger car sales plummet, strong JLR volumes critical for company in FY12
Sales of automobiles in India have started falling since the beginning of this financial year. Though volumes have been falling month-on-month, most automobile companies have shown a year-on-year growth, with the exception of Tata Motors and Maruti Suzuki. If July sales are anything to go by, Tata Motors is faced with slowing sales across segments. The company’s overall sales declined 6 per cent year-on-year to 63,761 units in July.
While the company registered a 3.8 per cent year-on-year growth (15,836 units) in volumes in medium and heavy commercial vehicles, it registered 43.1 per cent yearly decline in the passenger car segment. However, car volumes (ex-Nano) declined by 31 per cent annually to 10,737 units. The light commercial vehicle segment grew by 22 per cent to 24,962 units. Not only are sales of passenger cars down, the company’s low cost warrior, Nano, is also slipping. The Nano has not been able to sustain its past run-rate of 10,000 a month. In July, the company managed to sell only 3,260 units of the Nano, a 64 per cent yearly fall. Channel checks done by analysts suggest the company was incentivising sales through a variety of measures, which have been now withdrawn. Consequently, sales have come off, claim analysts.
Since the domestic business isn’t looking very good at the moment, it’s critical to look at volumes of Jaguar and Land Rover, as growth will come from there. But Q1 sales figures of JLR are also flat and the run rate is not good enough to meet a 300,000-units target. The saving grace could be Evoque, which is a new version of the Range Rover. The vehicle is expected to be launched globally in September. Last financial year, JLR had clocked sales of 244,000 and the company is targeting about 300,000 this financial year. However, the run rate so far does not indicate the target will be met.

In first quarter, JLR clocked 62,000 in sales, wherein the target should be around 70,000. If 18,000 pre-bookings of the Evoque is a trend, the new vehicle could come to the rescue of falling domestic sales. So, all eyes are on Evoque. Another issue the Street is concerned about is the falling margins. If discounts go up, thanks to slowing sales, then margins could be negatively impacted. The company’s standalone Ebitda margin is below 10 per cent, which is not good. Any decline from this is not good news. So, JLR needs to play the saviour.

 
     
 
   
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