A Closer Look At Tata Motors’ August Sales

by Trefis Team
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Strong domestic sales and a solid performance by Jaguar Land Rover, led to a nearly 14% year on year increase in Tata Motors’ (NYSE:TTM) sales for August 2017. Domestic sales of commercial vehicles grew by 24% year on year, as the company witnessed growing demand across segments and positive customer sentiment. With a lower tax regime on automobiles kicking in in India from July of this year, the company passed on the tax benefit to consumers, lowering the prices of its vehicles. This appears to have had a positive impact on sales, with medium and heavy commercial vehicles registering a 52% growth in the domestic market and the light commercial vehicles, registering a 44% growth. Similarly in the domestic passenger vehicles market Tata Motors saw a 10% year on year growth in August 2017 driven by strong demand for its Tiago and Tigor models.  While the company seems to be on an upward trajectory in the domestic market, this segment does not account significantly for its revenues and valuation.

Jaguar Land Rover Delivers Strong Performance

Jaguar Land Rover accounts for more than 95% of Tata Motors’ valuation according to our estimates and this segment registered a 4.3% increase in sales (year on year) in August 2017. These sales were driven by a strong performance in China where retail sales grew by nearly 30% and a 2% growth in North America. However Europe remained a drag on the company’s performance with a nearly 10% decline in sales (year on year). Introduction of the long wheel base Jaguar XFL and the new Range Rover Velar in China boosted sales of the company in the region. Its Discovery Sport and Evoque models are also performing well in the region. Jaguar Land Rover also performed strongly in the U.S. owing to the popularity of its Jaguar F-PACE and the new Range Rover Velar. Tata Motors continues to invest significantly in the JLR brand and six new JLR models debuted at the motor show in Frankfurt. The company also announced that from 2020, all new JLR models will be available in electric versions.

In conclusion, Tata Motors surpassed analyst expectations in August 2017 as both its volume based domestic business and profitable JLR business reported strong sales figures.

 

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