Strong JLR sales in China boost Tata Motors' quarterly profit

BENGALURU, India — Tata Motors Ltd on Friday posted a 67.2% surge in quarterly profit. Sales at its luxury car unit, Jaguar Land Rover (JLR), improved in key market China as the country led a recovery in the global automobile industry from the pandemic.

The Indian carmaker had logged losses for three straight quarters as the COVID-19 pandemic dented business in several of its key markets even as it was already dealing with uncertainties around Brexit, weak demand and rising costs.

The Brexit trade deal agreed upon in December has avoided the risk of tariffs on automotive parts and finished vehicles, Tata Motors said, adding that JLR remains encouraged by the Brexit trade deal.

JLR sales in China jumped 20.2% on-quarter and were 19.1% higher from the year-ago period. Retail sales at the unit, which accounts for most of the company's revenue, were up 13.1% from a quarter ago, but still 9% lower than pre-pandemic levels.

The company said it had saved 400 million pounds ($548.96 million) during the December quarter at JLR under Project Charge, taking the total savings to 2.2 billion pounds so far. Tata Motors has set a full-year target of saving 2.5 billion pounds.

Consolidated net profit came in at 29.06 billion rupees ($398.52 million) for the third quarter, compared with a profit of 17.38 billion rupees a year earlier. It had reported a loss of 3.14 billion rupees in the previous quarter.

The festive season in mid-November, during which Indians typically make big-ticket purchases, also helped overall sales.

"Due to a strong festive season and a clear preference for personal mobility, the PV business posted its highest sales in last 33 quarters," Tata Motors Chief Executive Officer and Managing Director Guenter Butschek said.

Total revenue from operations rose 5.5% to 756.54 billion rupees.

By Reuters