The economy in China, a big market for Tata Motors' luxury arm Jaguar Land Rover, has slowed to its slackest pace in 25 years and low consumer confidence is affecting car sales in that country. "The financial performance in the quarter was lower than the strong corresponding quarter last year due to softer sales in China partially offset by strong performance in the UK, Europe and North America," the company said in a statement.
Tata Motors said profit for the April-June quarter fell 49 per cent to Rs 27.69 billion, compared with the same period a year ago. Analysts on average expected profit to be Rs 34.59 billion. Net sales fell 6 per cent to Rs 601.80 billion.
Strong sales of its JLR cars, especially in China, have long propped up profits at Tata Motors, which has been struggling with sluggish demand for its cars in the last couple of years in India due to an economic downturn.
Jaguar Land Rover's sales in China fell by a third to 21,920 vehicles during the April-June quarter, pulling down total sales at the luxury carmaker by 1 per cent to 114,905. Sales in Europe rose 28 per cent to 28,878 vehicles.
Global automakers including BMW, General Motors and Ford Motor have cut prices on their Chinese models in recent months to combat weak sales growth.
China's automakers association has cut its growth forecast in the country with sales expected to rise by 3 per cent in 2015, down from 7 per cent expected earlier, as a major slump in the country's stock market depresses sales. Operating profits at Jaguar Land Rover fell by a quarter to 821 million pounds ($1.27 billion) and revenues fell 7 per cent to 5 billion pounds, the company said in a statement.
