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Strong Jaguar Land Rover sales drive tripling of profit at India's Tata Motors
[MUMBAI] Strong sales by luxury vehicle maker Jaguar Land Rover and higher demand for trucks in its home market powered a tripling of net profit at India's Tata Motors Ltd in the latest quarter.
Strong demand for the Jaguar XE compact saloon, nicknamed the 'baby Jag', and the Discovery Sport SUV pushed sales at the British luxury unit up 28 per cent to 158,813 vehicles in the fiscal fourth quarter ended March 31, Tata Motors, India's top automaker by revenue, said on Monday.
Jaguar Land Rover (JLR) sales in China, once its biggest and fastest-growing market, recovered during the quarter, rising 19 per cent after dropping 10 per cent in the previous quarter.
But that trailed 55 per cent growth in Europe where demand for its vehicles soared.
"China is really coming back and that will also be the focus," JLR chief executive Ralf Speth told a news conference.
"I am cautiously optimistic that we can continue around the world with very nice sales and distribution," he said.
JLR overtook Nissan last year to become Britain's biggest automaker.
Consolidated net profit at Tata Motors for the three months ended March 31 rose to 51.7 billion rupees (S$1.06 billion) compared with 17.17 billion rupees in the year-ago quarter. Net sales rose 19 per cent to 799.3 billion rupees.
Analysts had expected net profit of 34.36 billion, according to Thomson Reuters data.
Profit was helped by a one-time gain of 5.55 billion rupees from an insurance payment for damage caused to JLR cars in an explosion at Tianjin port in China last year.
JLR reported a 56 per cent rise in profit after tax for the quarter to £472 million (S$953 million).
JLR will continue to invest in new products, technology and manufacturing capacity, group chief financial officer C Ramakrishnan told reporters, adding that the company will focus on ramping up sales of its new cars including Jaguar's first off-roader, F-Pace.
Capital expenditure for JLR is expected to be £3.75 billion this fiscal year starting April 1, up from £3.3 billion last year, he said.
Tata Motors has made a one-off provision of 6.42 billion rupees that will be used over up to four years to carry out repairs on JLR vehicles affected by an industry-wide recall in the United States to fix faulty airbags supplied by Takata Corp .
JLR expects to recall about 100,000 units of the outgoing XF Jaguar saloon.
Tata Motors' domestic business reported a profit of 4.65 billion rupees for the quarter versus a loss of 11.64 billion rupees a year ago.