Nov. 8 (Bloomberg) -- Tata Motors Ltd., rose to the highest level in five months after its Jaguar Land Rover Plc unit boosted sales in emerging markets led by China and demand for the Evoque compact sport utility vehicle strengthened.
Tata Motors climbed 5.4 percent to close at 283.95 rupees in Mumbai, the highest close since May 15. The shares have climbed 59 percent this year, compared with a 22 percent increase in the benchmark Sensitive Index.
Profit at Jaguar Land Rover rose 77 percent to 305 million pounds ($487 million). Surging sales of Land Rover vehicles in China led by the Evoque have helped Jaguar Land Rover Chief Executive Officer Ralf Speth offset slowing demand in Europe. The Gaydon, England-based unit said in May it will spend 2 billion pounds this year to expand under a plan to introduce 40 new or upgraded models in the next five years.
“We expect the growth momentum of JLR sales to continue on the back of refreshes/new launches,” Aashiesh Agarwaal and Ashish Poddar, analysts at Edelweiss Securities Ltd. in Mumbai, wrote in a report dated Nov. 7. “Superior product mix and benign commodity prices also augur well for margin improvement.”
Jaguar Land Rover, which showed its first two-seat sports car in almost four decades at the Paris Motor Show in September, is targeting as much as 20 percent share of the full-size sports car market, Steven de Ploey, the marketing head for Jaguar, said Sept. 27. The company will also begin deliveries next year of the new Range Rover SUV.
The unit’s deliveries increased 14 percent to 77,442 vehicles in the three months ended Sept. 30. Land Rover’s sales rose 24 percent to 67,610 SUVs as demand for the Evoque, introduced in September last year, surged.
Wholesale sales of Land Rover vehicles in China increased 65 percent to 15,413 units in the three months ended Sept. 30, according to a presentation posted on Tata Motors website.
Jaguar Land Rover is turning to emerging markets such as China, Russia and South Africa to pursue growth. The luxury unit received written approval 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, Speth said yesterday.
“We continue to see demand for our vehicles in China,” Speth said at a press conference in Mumbai. “So we remain cautiously optimistic that the growth will continue in future. Producing in China will give us additional opportunities.”
The venture, to be based in the eastern city of Changshu in Jiangsu province will have a production capacity of 130,000 vehicles annually, according to a statement posted on China’s Ministry of Environmental Protection’s website.
Land Rover will have 160 Chinese dealerships by 2020, John Edwards, who heads the car brand, said in September.
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