By Nandan Mandayam and Meenakshi Maidas
BENGALURU (Reuters) -India’s Tata Motors expects local demand for passenger vehicles (PVs) to weaken in the first half of fiscal year 2025, with its finance chief flagging elections in the country as a dampener.
Tata Motors, India’s third-largest carmaker by sales, is known for its ‘Nexon’ and ‘Punch’ sport utility vehicles (SUVs). It also dominates sales of electric vehicles in the country.
The company will wait for elections to end to assess demand, Chief Financial Officer P B Balaji said on Friday in response to a Reuters’ query.
India’s elections, which started mid-April, end in early June.
Uncertainty around elections could hurt automakers’ sales in May, a dealers’ body said earlier this week. Passenger vehicle sales growth is expected to slow to 5% in financial year 2025 from last year’s 8.4% growth.
The Tata Motors’ executive expects a “better” second-half with “decent” PV sales growth.
Overall sales for luxury vehicles would “likely remain resilient” in fiscal year 2025, Tata Motors said, in what is a positive sign for its cash cow, Jaguar Land Rover (JLR).
Britain-based JLR contributes two-thirds of Tata Motors’ consolidated revenue and has seen a turnaround in profitability after years of losses, with a focus on margin-boosting luxury SUVs like the ‘Range Rover Sport’ and the top-selling ‘Defender’.
Tata Motors expects JLR’s earnings before interest and taxes (EBIT) margins in fiscal 2025 to be similar to the 8.5% it clocked in the previous fiscal year. JLR is targeting an EBIT margin of over 10% by fiscal 2026.
The Indian automaker’s consolidated net profit in the three months to March 31 more than trebled from a year earlier to 174.07 billion rupees ($2.09 billion), helped by a tax credit surge and strong sales of JLR’s SUVs.
($1 = 83.4856 Indian rupees)
(Reporting by Nandan Mandayam and Meenakshi Maidas in Bengaluru; Editing by Nivedita Bhattacharjee and Mrigank Dhaniwala)
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