JLR was already 80% of Tata Motors’ revenue — it may become even bigger now
- According to various analysts reports, Tata Motors is projected to see a revenue dip of nearly 48%.
- Although Jaguar Land Rover (JLR) ’s sales volumes declined 44% year-on-year, to 139,492 units in the first quarter, it was still a fairly decent quarter in comparison to its Indian counterpart.
- According to Motilal Oswal report dated July 11, post the resumption of operations, JLR’s sports car segment saw a sustained demand.
AdvertisementIt would have been a totally foregone quarter for Tata Motors if Jaguar Land Rover (JLR) wouldn’t have been part of its overall portfolio, according to analysts.
The automobile sector was already on a downtrend in the past three months in India and its luxury car segment JLR was expected to add to its woes. Jaguar Land Rover accounts for a major portion of the car market in the UK and China. And, China recorded a fairly normal quarter compared to other countries because the coronavirus peak had already passed Beijing in February. That provided some respite for Jaguar Land Rover.
JLR contributes around 82% of the total company revenue, according to third-quarter earnings of FY20.
Although Jaguar Land Rover’s sales volumes declined 44% year-on-year to 139,492 units in the first quarter, it was still a fairly decent quarter for JLR in comparison to its Indian counterpart.
|Sales||April to June 2020||April to June 2019||Growth %|
Despite expectations that JLR may cushion the company's falling revenue, analysts have projected that Tata Motors is likely to see a revenue dip of nearly 48%.
|Brokerages On Tata Motors||Q1 Revenue growth estimate %|
The spread of novel coronavirus has brought about job losses, furlough and pay cuts— and this has forced people to cut down on their discretionary spendings. But there was a silver lining even in these tough times. According to Motilal Oswal report dated July 11, post the resumption of operations, JLR sports car segment saw a sustained demand.
“The Range Rover Sport, the new Range Rover Evoque, and the Land Rover Discovery Sport emerged as the bestselling vehicles. Customer response to the new Land Rover Defender has been overwhelmingly positive, and as retailers have come back on line, there has been a surge of interest in the Land Rover. Deliveries for the Defender have started to ramp up in the quarter, with 1,970 vehicles sold in Jun,” the report said.
And, that is the reason the stock has run up 49% since March 31 until now.
Earlier last month in June Jaguar Land Rover (JLR) also decided to cut more than 1,000 contract-agency jobs in the UK as an effort to save another £1 billion to cope with the fallout from the coronavirus crisis.
The jobs are expected to be cut from across the business’ UK manufacturing sites, a process that was expected to begin by the end of July and last through the year.
The outlook for car sales this year in India seems to be a foregone conclusion as estimates from credit rating agency Moody’s earlier in May signalled nearly a 20% fall in global auto sales in 2020.
Also, the president of SIAM, Rajan Wadhera said, it will take as many as four years for India’s automobile industry to reach volumes last seen in the year to March 2018, and even that is an optimistic estimate.
SEE ALSO: Jaguar Land Rover plans to lay off over a 1,000 contract employees in UK
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