Tata Motors Ltd. fell in Mumbai trading on concern its luxury unit Jaguar Land Rover will face more pressure in China.
The stock declined 2 percent to 385.70 rupees at the close, compared with the 0.5 percent drop in the benchmark S&P BSE Sensex index.
Jaguar Land Rover has lowered prices in China after the automaker posted quarterly earnings that missed analyst estimates, amid what the company describes as a “normalization” of growth in the industry. The state-backed China Association of Automobile Manufacturers cut its forecast last month for total vehicle sale growth to 3 percent, which would be the slowest pace of expansion since 2011.
“We’re not convinced Jaguar Land Rover’s Chinese problems are behind them and we may see more pressure in coming quarters,” Max Warburton, an analyst at Sanford C. Bernstein Ltd., said in a note dated Aug. 10. “The outlook for JLR’s earnings in China remains unclear.”
Jaguar Land Rover, which posted a 33 percent decline in first-quarter deliveries in China, said it has lowered the Evoque’s price there and “realigned” pricing for the introduction of the new Jaguar XE. The unit sees profit margins narrowing in the year through March 2016 as demand wanes in China.