Indian multinational tata motors which gets four-fifth of its revenue from overseas operations is on 3rd position in the BW Real 500. Over 85 per cent of Tata Motor’s revenue comes from British marquee, Jaguar Land Rover (JLR).
Growth in wholesale volumes across products, richer product and market mix at JLR, launch of new models in the passenger car segment are the factors that triggered the growth figures for Tata Motors.
Its total income touched Rs 276,543 crore against Rs 264,058 crore in the previous year. However, the company’s consolidated profit after tax for the year came down to Rs 11,108 crore compared to Rs 14,060 crore a year earlier. This was mainly on account of slowdown in automobile sector in general and Commercial Vehicle (CV) segment in particular in India and other parts of the world.
Recently, Tata Motors launched its first product of 2017, Tata Xenon Yodha in Mumbai. Setting new benchmarks in the pick-up segment, the new range is suitable for a wide range of commercial applications.
According to Guenter Butschek, Chief Executive Officer and Managing Director, Tata Motors, “After a challenging year, the commercial vehicle market in India is growing slowly. Citing the reason behind the introduction of the new range, he added, “Huge trucks and small CVs are not ideal for Indian roads. Market is shifting to pick-ups nowadays.”
Tata Motors is aiming to capture this opportunity by introducing ranges in its various segments.
On the launch of the new Tata Xenon Yodha, Ravi Pisharody, Executive Director, Commercial Vehicles, Tata Motors, said, “With the introduction of the new Tata Xenon Yodha, we have a new range of smart pick-ups which offers customers a winning combination of high profitability and lowest cost of ownership.”
Meanwhile, JLR, Tata Motors’ UK subsidiary, has a strong product pipeline for the next three years. This is expected to drive the growth for JLR in the near future. Moreover, JLR will be having a major upgrade of the ‘New Discovery’ soon and it is expected to launch the mid-sized Range Rover, Jaguar new crossover E-Pace and upgrade the Range Rover Sport.
The company has demonstrated that it doesn’t lag behind developing electric vehicles after the launch of I-pace, JLR’s first electric vehicle at the Los Angeles motor show in November 2016. This development has come as a surprise amidst concerns that JLR has under-invested in the electric vehicle technology.
Another sign is that JLR’s margins will have multiple levers of expansion. The biggest one is the benefit of pound’s deprecation against the dollar since nearly 80 per cent of sales are from outside the UK. The impact of pound depreciation has already been reflected in lifting the average price per vehicles, but the operating profit margin side it is yet to be rectified.
Besides, with the demonetisation of the currency, bankers and economists do not see a pick up in the sales of automobiles in India in the near future.
Thanks to JLR, Tata Motors managed to step up to the third position and stay right up there once again!
BW Reporters
The author is associate editor at BW Businessworld
