The largest auto manufacturer by revenue in India – Tata Motors Ltd – revealed its first new vehicle model in four years. This step is considered a fine example of the companys attempts to succeed at its home market, especially considering the fact that its Land Rover and Jaguar brands are being quite successful worldwide.
Mr. Ranjit Yadav, the President of the passenger vehicle unit of Tata Motors Ltd, commented in a statement, which was cited by the Wall Street Journal: “We have been a little slow in product introduction. So, we have a little bit of catch up to do every year.” As reported by Reuters, Mr. Yadav also added in an interview: “We will start to gain some volumes in the personal (car) segment, where we did not have adequate representation… this starts to correct all that.”
The first car model released since 2010 is called Tata Zest and is a compact sedan build on a new platform. The company revealed that its petrol variant will be sold at the price of 464 000 rupees ($7593), while its top-end variant is to be offered for 599 000 rupees. The new vehicles target group is the growing middle class in India, which has recently been more oriented towards the offerings of Tata Motors Ltd competitors such as Honda Motor Co., Hyundai Motor Co. and Maruti Suzuki.
The Indian carmaker, which currently dominates the trucks and buses segment, rose 6.2% to 474 rupees, the most since September 2013 in Mumbai trading yesterday after beating analysts’ estimates with a threefold jump in profit.
According to Tata Motors Ltds statement, its net income rose to 54 billion rupees ($883 million) over the three months ended June. This result surpassed the average projection of analysts, which amounted to 37.9 billion rupees and is also considered as the largest profit jump since the quarter ended December 2010.
The result was benefited from the fact that the sales of the companys Jaguar and Land Rover brands on the territory of China increased by 61%. This helped Tata Motors neutralize the decreasing demand in its home market and increase its profit. The car manufacturer also reported that its luxury unit profit rose more than three times and reached 693 million pounds ($1.16 billion), while its group revenue increased by 38% to 646.8 billion rupees.
Tata Motors Ltd was 1.05% down to trade at 469.00 Indian rupees per share by 7:55 GMT, marking a one year change of +60.29%. According to the information published on the Financial Times, the 52 analysts offering 12-month price targets for Tata Motors Ltd have a median target of 505.50 rupees, with a high estimate of 612.00 rupees and a low estimate of 334.00 rupees. The median estimate represents a 13.20% increase from the last price of 446.55 rupees.