Market Overview

Tata Motors Reports Quarterly Jump, Boosted by Jaguar Land Rover Division

Very mixed news has been released lately on Tata Motors (NYSE: TTM).

The Mumbai-based company reported a 71 percent jump in net profit to $566 million (35.42 billion rupees) for its fiscal second quarter ending September 30, compared to the same time period a year earlier. Revenue rose 31 percent, beating analysts' expectations.

But nearly all of that profit came from Tata's high-end stable of luxury cars at its Jaguar Land Rover (JLR) Automotive unit – which was purchased from Ford (NYSE: F) in 2008 and where , according to the Associated Press, quarterly profit climbed 66 percent to $815 million (507 million pounds).

At the same time, AP notes, sales of Tata-branded passenger and commerical vehicles in its Indian home market fell 33 percent, compared to the same quarter last year.

In its press release, Tata blamed the global economic slowdown, higher fuel prices and a “tight financing environment” for its domestic sale woes. And Reuters reports sales of Tata's Nano mini-car, “dubbed the world's cheapest car, “ have been very disappointing – while there hasn't been an all-new, Tata-brand passenger vehicle released in three years.

Karl Brauer, senior analyst at Kelley Blue Book, tells Benzinga that Tata's domestic troubles also come from increased competition from both international and domestic Indian companies. But he's full of praise when it comes to what the company has done with its JLR unit.

I'm realy thrilled to watch these brands do so well,” he says, while pointing to the major engineering and development improvements Tata has made to “these two storied British brands,” while implementing cutting-edge, 21st century technology.

At the same time, says Brauer, both Jaguar and Land Rover “have really mastered the art of luxurious, premium interior experience” – which has improved JLR sales internationally but especially in China – which The Wall Street Journal says is JLR's largest market, with a nearly 24 percent share of sales.

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