Land Rover may be in rude health but sister brand Jaguar requires constant attention when it comes to world wide sales. If Jaguar falters then not only is Land Rover stung in the tail but parent owners, Tata Motors, also have the wind taken out of their sails.
It isn’t clear if Jaguar was attributable to the sting in the tail or taking the sail out of the wind as Tata Motors profits fell by 2 percent in the last quarter.
The cause was lower sales of luxury vehicles in the crucial Chinese market which was once JLR’s fastest rising market.
Tata Motors declared that profits had declined by 26 percent to $636 million. Jaguar Land Rover strong performance over the last few years has provided profitability for Tata Motors by offsetting losses of the company’s domestic car and truck business.
New car sales in China have slowed and the premium luxury market has also been hit as the Chinese government issued a decree to discourage spending on luxury assets.
Jaguar Land Rover are not the only car manufacturer to be hit, every car maker has seen loses in China. Cleverly Jaguar Land Rover spun this as a period of “stabilisation” in a fluctuating market.
Nevertheless Jaguar Land Rover will be increasing dealerships in China to 200 outlets by the end of 2016.
Localised production of the Range Rover Evoque and Discovery Sport and non-recurrence of an annual tax receipt also cut into the profitability. In the long term this trend should be reversed.
On a more positive note JLR had a boom time in Europe and North America which stemmed the bleeding of profits in China.
Sales of JLR cars accelerated by 48 percent in Europe and in the US with Land Rover recording a 37 percent increase in the US alone.