In India, it is being reported that 'because of the success of the Evoque in the world markets last year, the performance of Tata Motors has largely been driven by Jaguar Land Rover (JLR); even though Tata's domestic business is seeing a slowdown in sales, the stock is up 34 per cent year-to-date. Commentators suggest that this domestic slowdown did not matter while JLR is driving sales and profitability but question how the company will fare as competition stiffens in the luxury market across the world. They note that the market for luxury vehicles is becoming very competitive as competitors offer heavy discounts in key markets like China, which contributes 35 per cent of JLR’s Ebitda (earnings before interest, taxes, depreciation and amortisation). That market is growing at 70 per cent, annually and Morgan Stanley 'expects JLR to post 17 per cent volume growth in FY13, but suggests that margins will remain capped at 15 per cent.'
In contrast another landmark in the success story that is Tata’s acquisition of JLR is the fact that, in the year since Evoque production began, sales have reached nearly 80,000 vehicles. Demand, for the company’s whole range has increased in all major geographies in the year ended March 31, including in North America and Europe despite the economic uncertainties there. JLR sales jumped 15% in North America, while in Europe (excluding Russia), volumes grew by 27%. It’s no surprise that sales in China surged 76%. Globally, JLR sales in total surged 33% to 251,632 SUVs. In India, where sales of luxury SUVs are growing in line with rising incomes, JLR is holding its own as an alternative to the German brands of Audi, BMW and Mercedes. This improvement in JLR's fortunes is remarkable in an industry where few brands survive acquisition intact. When Tata Motors, a company best known for producing heavy trucks, acquired JLR, sceptics thought it a disaster for the Mumbai-based auto maker. Tata shelled out a reported, US$2.3 billion to Ford as the blue oval struggled to manage its sales slowdown in 2008. JLR posted a net profit of 1.48 billion pounds in the last year, a growth of 43%. Revenue climbed 37% to 13.5 billion pounds.
Last month JLR said, 'given increased sales volumes and profits, there is a need to increase manufacturing capacity and we see increased opportunities to develop new products to drive further profitable growth. As a result, total capital spending is expected to increase to in the region of 2 billion pounds.' New models are being worked on and several concept vehicles have been shown to gauge public reaction including the Land Rover DC100, the Evoque Convertible and Jaguar cars. Meanwhile in China, JLR agreed in March to form a joint venture with Chery Automobile Co to manufacture vehicles in the world’s biggest automobile market and is continuing its efforts to build a factory in Brazil.