JLR drives Tata Motors to profit in April-June
11 August 2010
The acquisition of Jaguar Land Rover (JLR) by Tata Motors, that was criticised by analysts during the global economic crisis, has posted its highest-ever quarterly profit as demand for luxury cars are back with a boom.
Considered a white elephant during the global financial crisis that even led the UK government refusing to underwrite an €366-million loan passed by the European Investment Bank in 2009, JLR has achieved an unthinkable turnaround by posting an 81 per cent increase in sales for the first quarter ending June to Rs15,387 crore, from Rs8,508 crore for the reporting quarter last year.
In March 2010, JLR posted a net profit of Rs416.96 crore for the third quarter ending 31 December 2009 (See: JLR helps Tata Motors post Rs650-crore profit in 3Q 2009), after posting 5 consecutive quarterly losses and its first quarterly profit since it was acquired by Tata Motors in June 2008 from Ford Motors for $2.3 billion. (See: Tata Motors becomes new owner of Jaguar, Land Rover)
The Birmingham-based JLR's pre-tax profits were Rs1,590.25 crore against a loss of Rs873 crore last year.
JLR sold 57,153 vehicles compared to 35,947 a year earlier and retail sales improved in the quarter, on the back of continued positive response for Land Rover products and the newly launched Jaguar XJ model. There was a strong recovery across all the regions, with China standing out registering a growth of 104 per cent, said the Mumbai-based car maker in a statement.
When vehicle sales in the UK had plunged last year and cash-strpped JLR was reeling under cash flow problems to run its day-to-day operations, a Chinese trade delegation to Europe signed a life-line deal with JLR worth £600 million in February 2009 to purchase13,000 vehicles over the next three years. (See: China bails out JLR with £600-million order)
JLR sold more than 14,000 vehicles in China in the seven-months between January and July, this year. Land Rover's sales surged by a massive 122 per cent and Jaguar's by 86 per cent.