Tata Motors – India’s top vehicle maker and part of the group which owns Jaguar and Land Rover – saw first-quarter profit drop 30 per cent, as expected, on foreign exchange losses and rising input costs, and said margins would remain under pressure.
Tata Motors, due to launch the world’s cheapest car, the Nano, in October, will seek to protect margins through cost reductions, price increases and more financing options for vehicle purchases, managing director Ravi Kant said.
“Undoubtedly, for the industry this will perhaps be the most challenging year,” he added. “In spite of quite a gloomy situation, we are feeling quite confident of our position, because of steps we have been taking, such as price increases and cost reductions,” he said.
The company said April-June net profit fell to 3.26 billion rupees ($77 million) from 4.67 billion rupees a year earlier.
Net sales rose to 69.28 billion rupees from 60.57 billion rupees, compared to a poll of net profit of 3.2 billion rupees on net sales of 65.7 billion rupees. Operating margin, a key gauge of business profitability, fell to 7.7 per cent from nine per cent a year earlier.
The company sold a 24 per cent stake in its auto parts unit, Tata AutoComp.