Jaguar Land Rover Continues To Accelerate Sales By More Than Its Competitors In 2016
Tata Motors‘ (NYSE:TTM) British marquee brand Jaguar Land Rover forms just under 90% of the group’s valuation, as per our estimates. 2016 has been a solid year for JLR, posting record-breaking results for the first eight months, selling 372,978 vehicles between January and August, up 24% year-over-year. At the helm of this growth is the whopping 72% year-over-year growth in retail sales for Jaguar through August. High demand for compact luxury vehicles has been the main reason for Jaguar’s rapid sales rise in the last year or so. JLR has beaten the growth seen by any of the German trio of Mercedes-Benz, Audi, and BMW in the U.S. and Europe, falling short of only Mercedes’ growth rate in China.
However, despite strong revenue growth of 9% year-over-year in Q1 fiscal 2017 (April-June 2016), the consolidated profit after tax fell 38% year-over-year in the quarter. This was primarily due to unfavorable foreign exchange. Most of the foreign exchange impact on Tata Motors’ Q1 was at JLR. The foreign exchange impact at the division stood at £207 million, including revaluation of £84 million that mainly consisted of euro payables, resulting from the depreciation of the pound sterling after the June 23 U.K. vote to exit the European Union, and negative £123 million in the hedges realized in the quarter. In fact, excluding the £84 million, the EBITDA margin for JLR rose more than 150 basis points for Q1.
Led by its new entry-level model, the XE, Jaguar more than doubled its sales in the first eight months of 2016. This also helped make Jaguar Land Rover Europe’s fastest-growing automaker this year. JLR was also the fastest growing group in Europe in 2015, however, the growth that time was led by the Land Rover brand, which forms three-fourths the net retail sales for JLR.
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