(Reuters) -Indian carmaker Tata Motors reported third-quarter profit below market expectations on Wednesday, weighed down by weakness in its luxury Jaguar Land Rover (JLR) business and as car sales slowed down at home.
Car sales in India have lost momentum this fiscal year, growing just 1.8% in the last nine months, far slower than the 7.4% rise seen a year earlier, as consumers grappled with high inflation.
Tata Motor’s domestic car sales rose 1% in the October-December quarter, slower than an industry-wide rise of 4.5%.
Global carmakers are also wrestling with higher costs and slowing demand, especially in China, as consumers opt for less expensive local options, prompting companies to offer discounts to boost sales.
Tata Motors’ income from selling cars in India fell 38%, while JLR’s pre-tax profit before one-off items declined 12% due to large discounts and some foreign exchange losses.
JLR accounts for three-fourths of pre-tax profit for Tata Motors, and sales of the luxury unit’s pricey Range Rover Sport SUVs are a cash cow for its Indian parent.
Overall, Tata Motors’ profit fell to 54.51 billion rupees ($630 million) in the third quarter from 70.25 billion rupees a year earlier. This fell significantly short of analysts’ expectation of a profit of 67.42 billion rupees, per data compiled by LSEG.
“While JLR wholesales are expected to improve further in Q4 FY25, we remain watchful on the overall demand situation, particularly in China,” the company said, without giving further details.
Since last year, the company has shifted its focus to other regions including North America.
JLR’s wholesales, or sales to dealers, grew 3.3% in the quarter, compared to a 3% decline in the previous quarter.
(Reporting by Nandan Mandayam in Bengaluru; Editing by Savio D’Souza and Sonia Cheema)
