Passenger Vehicle Sales: Tata Motors Down 47%, JLR Up 15%

Tata Motors has been obediently following a trend since the last few months, wherein its sales volumes are drastically lower in each month as compared to the corresponding month of the previous year while the sales volumes of Jaguar Land Rover are robust.

The same continued for the month of April 2013. Tata Motors sales figures showed a decline of 14.86% as compared to April 2012. This was primarily because of the 48.94% decline in passenger vehicle sales. A weak demand combined with gaps in the product portfolio has led to this massive downfall as compared to the previous year. Growth in the sales volumes of commercial vehicles was moderate at 3.98% in April 2013 over April 2012.

At the other end was the growth in sales volumes of Jaguar Land Rover (JLR). In April 2013, sales increased by 12.16% over April 2012. Consistency was seen in the performance of Jaguar and Land Rover which had sales grow by 12.30% and 12.13% respectively on a yearly basis. Geographically, the major growth drivers for JLR were UK and Asia Pacific. Sales in these two grew by 31.78% and 36.86% respectively in April 2013 on a yearly basis.

In the global sales figures of Tata Motors released on May 15, 2013, volumes were pushed higher by JLR sales while there was a significant downward pressure on the volumes on account of the dismal performance of Tata Motors. The group global sales came in lower by 5.95% (discounting the distribution of Fiat cars in India in April 2012) as compared to April 2012. Tata’s global passenger vehicle sales were lower by 46.62% while those of JLR were up by 14.84% on a yearly basis. Sales of commercial vehicles remained moderate, coming in higher by 5.16% as compared to April 2012.

Overall, the trend of underperformance of Tata Motors and outperformance of JLR has been continuing since months now. JLR’s robust performance has not only given considerable support to the consolidated volumes of Tata Motors but has also helped it attain profitability. Since about 70% of the revenues of Tata Motors and more than 90% of its profits come from JLR, the outperformance in JLR has been the factor behind our bullish outlook on the company. As this trend continues, and provides support to the overall functioning of Tata Motors on a consolidated basis, we maintain our positive long-term outlook on Tata Motors.