Tata Motors shares price slip as Jaguar Land Rover sales skid

Tata Motors share price saw selling pressure in early trading hours on Monday with the quantum of decline magnified over the 1.2% decline in the benchmark indices.

The share price lost nearly 4% of its value as the markets opened to trade after the weekend, reacting to the retail sales numbers from its crown jewel Jaguar Land Rover (JLR). The company had disclosed the sales numbers from JLR after trading stopped for the day on Friday.

Luxury carmaker Jaguar’s retail sale declined 10% to 17,340 units in the second quarter ended September 30 while sports utility vehicles label Land Rover saw retail sales decline by 3.6% to 70,781 units last quarter over the previous year.

Although the decline was much lower compared to the previous quarter ended June 30, overall, in the first six months of the year ended September 30, Jaguar sales were down by a third to 32,547 units while that for Land Rover were down by a fifth compared to H1 FY22 to 134,399.

Put together, JLR’s retail volumes were down 4.9% in Q2 and 23.2% in H1 FY23.

On a sequential basis, retail sales of JLR were higher in China (+38%), North America (+27%) and overseas (+14%) but were lower in UK (-7%) and Europe (-10%).

Wholesale volumes were 75,307 units in the period (excluding its China JV), up 4% compared to the previous quarter ending June 30, 2022. This improvement was lower than planned, primarily due to a lower-than-expected supply of specialised chips from one supplier which could not be readily re-sourced in the quarter. 

This was mitigated partially by prioritisation of production to the higher margin products, while new agreements with semiconductor suppliers are expected to enable sales improvements in the second half of the fiscal year.

The production ramp up of New Range Rover and New Range Rover Sport improved with 13,537 units wholesaled in the quarter, up from 5,790 in Q1. This is expected to continue improve in the second half, it said.

The company said it continues to see strong demand for its products, with global retail orders again setting new records in the quarter. As at September 30, 2022, the total order book has grown to 205,000 units, up around 5,000 orders from June 30.

Demand for the New Range Rover, New Range Rover Sport and Defender remain strong, accounting for over 145,000 of the 205,000 orders.