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Tata Motors’ muted consolidated performance for the December 2012 quarter has been impacted by both the domestic business as well as the Jaguar Land Rover (JLR) business.
Though Land Rover retail volumes grew by about 17 per cent year-on-year, the three Jaguar models -XF, XJ and XK (constituting about 20-25 per cent of the total JLR volumes) witnessed an eight per cent drop in volumes over the same quarter last year.
Even among Land Rover vehicles, volume growth predominantly came from select models such as the Freelander and the Range Rover Evoque, while the Defender, Discovery and Range Rover sport witnessed weak off takes.
But the good news is that this drop may be temporary, with customers postponing purchases ahead of model year 13 (MY 13) launches.
The recently launched new Range Rover coupled with MY 13 products such as the XF Sportbrake, AWD and smaller engine derivatives of the XF and XJ is expected to give a leg-up to volumes in the next few months.
However, margins have currently come down to 14 per cent vis-à-vis 17 per cent in the same quarter last year.
Given the changing product mix towards slightly lower end vehicles such as the Evoque and the marketing expenses involved in launching the new products, the pressure on margins is expected to continue.
Domestic outlook weak
On the domestic front though, it may take longer than a quarter or two for volumes to recover.
For one, though light commercial vehicles (CV) such as the Ace are still seeing volume growth, medium and heavy CV sales are in no hurry to recover.
For the first nine months of this year, MHCV volumes for the company have dropped by 26 per cent over the same period last year.
Secondly, Tata Motors continues to face rough weather in its passenger vehicles business.
Even as utility vehicle (UV) sales in the industry soared in the last one year, the company has not been able to capitalise on the demand.
Despite the introduction of the Safari Storme and a new variant of the Aria during the quarter, UV volumes for the company dropped by five per cent.
Although the company is working on rejigging its passenger car business, it may take a while before the results show on the ground.
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