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Tata Motors to Face Some Shrink in Profits Figures Due to the Declining Demand of Jaguar Land Rover in China

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Published on : May 27, 2015

The quarterly profits of Tata Motors went down, owing to the declining demand for Jaguar Land Rover vehicles in China.

On Tuesday, Tata Motors informed that the net income fell around 56% to US$269 million (17.2 billion rupees) in the first quarter that ended in March, from 39.2 billion rupees that was in the previous year. The profits at the Jaguar Land Rover segments went down 33% to 302 million pounds.

Tata Motors' earnings were also affected by a very much prolonged decline in the sales of some of its light commercial vehicles in India, which is basically its home market.

The revenues of Tata Motors went up 3.5% in the quarter to 675.8 billion rupees. And the sales of Jaguar Land Rover increased 8.9% to around 5.83 billion pounds.

Tata Motors stated that profits of Jaguar Land Rover before the tax went down 31% due to the amortization and higher depreciation, and also the unfavorable revaluation of foreign currency debt and unrealized hedges, which are not actually eligible for hedge accounting treatment.

In a press conference, which was held in Mumbai on Tuesday, the head of treasure, Vijay Somaiya stated that Jaguar Land Rover has made some plans to spend around 3.8 billion pounds in the year, which has started from 1st of April. He also said that the market conditions in China seem to be soft and the company will also continue to monitor.

He further added that the Jaguar Land Rover began with the sales of Evoque, which was made in China locally in the month of February. Launching of new models and conditions in Russia and China may result in lowering the margins of Ebitda for JLR in the present fiscal year.