Tata Motors Falls Most in 10 Days on Jaguar Strike: Mumbai Mover
Tata Motors Ltd. (TTMT) was poised for its biggest decline in 10 days in Mumbai trading after its Jaguar Land Rover Plc unit said delivery workers supplied by Deutsche Post AG (DPW)’s DHL unit voted to strike over pay.
Tata Motors fell 2.7 percent to 288.20 rupees as of 2:23 p.m. in Mumbai, headed for the biggest drop since June 26. India’s largest automaker has lost 7.9 percent this year, while the benchmark S&P BSE Sensex has declined 0.6 percent.
The strike at the luxury unit, which contributed 72 percent of Tata Motors revenue in the year ended March 31, may slow the company’s plan to revive profit growth. Jaguar Land Rover may consider replacing DHL as its delivery partner if the strike continues, according to Umesh Karne, an analyst at Brics Securities Ltd. in Mumbai.
“Deliveries may be impacted in the short-term because logistics is a very major part of the sales,” said Karne, who has a buy rating on the stock. “Jaguar Land Rover may consider a new partner if the strike lasts longer than 15-20 days.”
Jaguar Land Rover asked the DHL staff to return to negotiations, spokesman Ken McConomy said yesterday. The striking workers are seeking pay similar to that of Jaguar Land Rover employees, the Sunday Times reported.
DHL didn’t immediately return calls to their office in Bonn, seeking comment.
Deliveries at the luxury unit, which Tata Motors bought from Ford Motor Co. in 2008, increased 19 percent to 116,340 vehicles in the three months ended March 31. In comparison, sales at the local business plummeted 29 percent to 184,942 units, as customers in India held off purchases on expensive loans and slowing economic growth.
The luxury unit based in Gaydon, England is turning to emerging markets such as China, Russia and South Africa to pursue growth. Global retail sales in the year ended March 31 rose 23 percent to 374,669 vehicles, with those in China surging 73 percent to 77,075 units, according to company data. China was the company’s largest market, it said in January.
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