Tata Motors Ltd. quarterly earnings fell as demand for Jaguar Land Rover vehicles in China slumped amid a market downturn.
Net income fell to 27.7 billion rupees ($ 434 million) in the quarter to June 54 billion rupees a year earlier, the company based in Mumbai.
Proceeds from the Jaguar Land Rover unit fell to 492 million pounds ($ 764 million) from £ 693 million.
Retail sales of Jaguar Land Rover plunged 33 percent in China in the quarter, resulting in a decrease of 1 percent in deliveries worldwide. The luxury unit has reduced its sales targets and prices in China as automakers Toyota Motor Corp. BMW AG warn of a slowdown in the market for the world's largest automaker.
Tata Motors earnings were also affected by a prolonged fall in sales of light commercial vehicles in India.
Proceeds from the automaker dropped to 610.2 billion rupees from 646.8 billion rupees. Sales of the luxury unit fell to 5 billion pounds of 5.35 billion pounds.
Price cuts
JLR has reduced prices, sales and production targets in China, said a senior executive, struggling with high inventories in the market downturn.
"Production and sales targets (for JLR in China) have been adjusted to reflect the market downturn," said Tata Motors Chief Financial Officer C. Ramakrishnan today in a conference call. He did not elaborate on the extent of the cuts.
Tata Motors has also reduced the price of locally made SUV Range Rover Evoque JLR by up to 6 percent, and lowered the price of launch of its compact sedan Jaguar XE, he said, but gave no details of prices.
JLR should see a return to sales growth in the December quarter driven by new launches and management improves brand awareness for Chinese-made Evoque said Nitesh Sharma auto analyst at brokerage Phillip capital.
Jaguar Land Rover has forecast sales will rise to a record 500,000 vehicles this year, up from 462 678 units in 2014, helped by new models like the sedan entry level XE Jaguar and Land Rover Discovery sport. Sales fell 0.5 percent to 239 212 units in the first half.
Net income for the automaker lost 27.7 million rupees 31.4 billion rupees median of 31 analyst estimates compiled by Bloomberg.
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