Tata Motors has reported its Q2 FY19 sales figures. The report reveals that the wholesales (including exports) in the quarter grew 25 percent with 190,283 units. It claims of a rising market share gain with CV up by 90bps and PV up by 50bps. While growth in the CV segment is attributed to the economic growth, the growth in the PV segment is attributed to the launch of new products.
In the domestic market M&HCV trucks grew 23 percent, ILCV trucks +27 percent, SCV & Pick Ups +34 percent and CV Passenger +8 percent. PV was up 18 percent with Nexon and Tiago said to be delivering strong growths. Tata Motors has reported a 33 percent rise in revenue to Rs 17,759 crore.
Guenter Butschek, CEO and MD, Tata Motors, said, “Our solid, all-around performance in Q2FY19 has impressively demonstrated that Tata Motors ‘Turnaround 2.0’ is in full swing. The continued improvements were made possible due to a robust product and innovation pipeline, strong market activation, rigorous cost reductions and structural process improvements. Most importantly the entire organisation is on its toes and working to embed the Turnaround culture as our new way of life. Therefore, despite near term market challenges, I am confident that Tata Motors will continue its journey of delivering 'Consistent, Competitive and Cash Accretive Growth' in the coming quarters too.”
Tricky China and uncertain Brexit pulls back JLR
JLR has reported declining retail sales of 13.2 percent to 129,887 vehicles in Q2 FY19. The company has admitted that challenging market conditions in China, where demand was adversely impacted by consumer uncertainty following import duty changes and escalating trade tensions with the US were one of the prime reasons for the decrease in sales. In Europe, sales were also said to be affected by continuing weakness in diesel demand and the introduction of new WLTP homologation rules on emissions. According to the report, UK sales were adversely impacted by diesel taxation and regulations, alongside continuing uncertainty related to Brexit. Reflecting lower wholesales, the revenues for the quarter were £5.6 billion (Rs 52,897 crore), 10.9 percent lower year-on-year.
On a positive note, the company has reported that demand for SUVs remained strong in North America. JLR has begun production at its new plant in Nitra, Slovakia. The total investment in new vehicles, next-generation automotive technologies and facilities to support its future sustainable growth was reported to be £1 billion (Rs 9,451 crore).
Prof Dr Ralf Speth, Jaguar Land Rover chief executive, said: “In the latest quarterly period, we continued to see more challenging market conditions. Our results were undermined by slowing demand in China, along with continued uncertainty in Europe over diesel, Brexit and the WLTP changeover. Given these challenges, Jaguar Land Rover has launched far-reaching programs to deliver cost and cash flow improvements of £2.5 billion (Rs 23,615 crore) over the next 18 months. Together with our ongoing product offensive and calibrated investment plans, these efforts will lay the foundations for long-term sustainable growth. We remain focused on delivering improved profitability and cash flow in the second half while pressing ahead with our product offensive.”
In the quarter, Net profit from joint ventures and associates has reportedly contributed Rs 86 crore as compared to Rs 510 crore in the previous year. The decrease is coming mainly from the lower profitability in the JLR’s China JV (CJLR) due to market challenges. Other income (including government grants) was Rs 617Cr versus Rs 506Cr in the same quarter in the prior year.