Jaguar Land Rover, a subsidiary of Indian auto major Tata Motors, reported a decline of over 12% in sales for the month of September, forcing the company to announce a temporary shutdown of its West Midland plant in the U.K.
JLR reported total retail sales of 57,114 vehicles in September 2018, down 12.3% year-on-year despite strong sales of some of its new models, including the Range Rover Velar and the Jaguar I-PACE and E-PACE, Tata Motors said in a stock exchange notification.
Further, sales in China declined by 46.2%, as ongoing market uncertainty resulting from import duty changes and continued trade tensions held back consumer demand, it added. The slowdown in sales was visible across geographies, with the U.K. and Europe registering a decline of 0.8% and 4.7%, respectively. In North America, Jaguar Land Rover sales were 6.9% lower.
Key markets hit
“As a business, we are continuing to experience challenging conditions in some of our key markets,” the statement said quoting JLR chief commercial officer Felix Brautigam. “Customer demand in China, in particular, has struggled to recover following changes in import tariffs in July and intensifying competition on price, while ongoing global negotiations on potential trade agreements have dampened purchase considerations,” he added. Shares of Tata Motors fell nearly 20% on Tuesday during intra-day to touch a low of Rs. 170.65, a level last seen nearly seven years ago in December 2011.
On the BSE, shares of Tata Motors declined 13.40%, or Rs. 28.50, to close at 184.25.
Market participants said that shares of Tata Motors would react to developments at JLR as the valuation of the Indian company was predominantly dependent on JLR’s performance, since the domestic business of making trucks and cars accounted for a minor portion of the revenues.
“Tata Motors will see some fluctuations in the near term as the overhangs still remain,” said Aditya Bapat, Senior Research Analyst, IIFL Securities.
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