Oct. 15 (Bloomberg) -- Tata Motors Ltd. said sales at its Jaguar Land Rover unit fell 4.3 percent in September, the first decline in 14 months, as a slowing global economy sapped demand for luxury vehicles.
Deliveries of Jaguar cars and Land Rover sport-utility vehicles fell to 26,461 units last month from 27,639 a year earlier, Tata said in a statement today. It was the first drop since July 2011, and missed the 30,000 median estimate of 20 analysts surveyed by Bloomberg News.
The luxury unit, based in Gaydon, England, accounted for 72 percent of Tata Motors’ revenue in the three months ended June. The automaker plans to invest 2 billion pounds ($3.2 billion) in the unit this year to develop new models and expand factories to cater to rising demand in China and Russia and reduce its dependence on Europe. The 17-country euro area economy will contract 0.4 percent this year, according to the International Monetary Fund.
“September is usually a good month for U.K. sales, so these numbers are below our expectations,” said Umesh Karne, an analyst at Brics Securities Ltd. in Mumbai. “Going forward, sales will be under pressure until the new Range Rover deliveries begin.”
Companies have been forced to cut costs and eliminate jobs to weather the downturn in Europe. The euro-area unemployment rate reached a record 11.4 percent in June and held at that level through August.
Deliveries of Jaguar branded cars fell 49 percent to 2,808 units, the steepest monthly drop since Tata Motors started reporting data in December 2009. Land Rover SUV sales increased 7 percent last month, according to the statement.
Tata Motors fell 0.7 percent to 269.40 rupees at the close of trade in Mumbai. The shares have gained 51 percent this year, compared with a 21 percent increase in the benchmark Sensitive Index.
The luxury unit said Sept. 21 that it received a nod from China’s main industry planner to form a venture with Chery Automobile Co. and begin making cars in the world’s biggest auto market. China’s government requires overseas automakers to work with Chinese companies to produce domestically and avoid the nation’s 25 percent import duty.
The Evoque, the hit model that has a special edition styled by former Spice Girls singer Victoria Beckham, went on sale in September last year and accounted for more than 37 percent of Land Rover-brand sales in the quarter ended June 30. Tata will begin deliveries of the new Range Rover in early 2013.
To contact the reporter on this story: Siddharth Philip in Mumbai at email@example.com
To contact the editor responsible for this story: Young-Sam Cho at firstname.lastname@example.org