JLR, Rescued by Tata, Now Sustaining Parent

MUMBAI – Jaguar Land Rover continues to prop up parent Tata Motors as India’s second-largest auto maker saw overall sales, revenues, profits and market share decline in fiscal 2013.

Total sales declined 15.3% to 314,464 and exports were down 14.1% to 7,274 in the 12 months ending March 31, compared with a year ago, the auto maker says in its annual report. Revenues fell 18% to Rs44.8 billion ($749 million) and net profits plummeted 76% to Rs3 billion ($50.8 million). Tata cars’ market share slipped to 11.7% from 14.1%.

Replacements for aging vehicles such as the Nano, Manza and Indica are being developed but may not come to market for a couple of years.

Managing Director Karl Slym’s makeover plan envisions an investment of Rs150 billion ($2.5 billion) over three to five years, but little progress has been made. A new compact car codenamed X0 and based on the Indica platform may be produced at Tata’s new plant at Sanand, where utilization currently is less than 20%.

In contrast, JLR, which was on the brink of extinction before Tata acquired it five years ago, has flourished all over the world with attractive models, new technologies and a favorable exchange rate between the dollar and British pound. U.S. sales of the luxury marque increased 13% and pretax profits 27% in calendar 2012, the auto maker says.

Before he retired as Tata chairman, Ratan Tata visited the U.S. and asked JLR dealers what they needed to compete in their segment. They got the all-wheel-drive vehicles they requested, and learned the auto maker is developing new platforms for future sedans to compete with the BMW 3-Series, Cadillac ATS and Mercedes-Benz C-Class.

But JLR faces an uphill struggle in India, home of its parent company. The luxury brand delivered 1,597 cars in 2012, their first year on the Indian market, according to WardsAuto data. Rival Audi sold 5,791 units and Mercedes-Benz and BMW sold 4,826 and 3,886, respectively.

Tata has restored JLR’s global credentials but still faces critical times in India. It cut the price of a stripped-down version of its Aria SUV 40%, to Rs1 million ($16,950), early this year. But the Aria has made no headway against rival utility maker Mahindra & Mahindra.