Tata Motors announced the first fiscal quarter results of 2016-16, showing 49 per cent dip in the net profit. While the domestic passenger and heavy commercial vehicles’ sales showed promising hike, the overall numbers took a massive hit with the slump in Jaguar Land Rover sales in China.
Despite the strong growth in Europe, UK and North American markets, the sales in China pulled down revenue by 6.5 per cent to five billion pounds and subsequently reduced JLR profit by 29 per cent to 492 million pounds. The results had a significant impact on the Tata numbers with the net profit dropping to Rs 2,769 crore, 49 per cent lower compared to Rs 5,398 crore from the same period last year.
The top-line profit in the domestic market suffered as well, with a drop of 35 per cent to Rs 258 crore. The domestic passenger car volume increased by 27 per cent in the quarter courtesy the recently launched Zest, Bolt and the GenX Nano.
The economic growth in China has slowed down to a 25-year low and the impact will be seen on the results of all the major carmakers in the world. JLR and most of its competitors have cut prices and even production in China in order to realign themselves with the market.
