Tata Motors' consolidated revenues from operations in Q3 FY2021 grew over 5 percent year-on-year at Rs 75,653.8 crore as sales picked up in key markets across the world. It clocked a strong 67 percent growth in profit in Q3 FY2021 at Rs 2,906 crore compared with a profit of ₹1,738 crore in Q3 FY2020.
In Q3FY21, Tata Motors’ domestic retails continues to be higher than wholesales in PV due to continued strong demand. Market shares of M&HCV was steady at 59 percent, ILCV improved sharply to 46 percent and SCV started improving its shares. PV market shares is up 300 basis points compared to FY2020 at 7.8 percent.
Domestic market outlook
As demand situation shows signs of improvement, the company is debottlenecking its supply chain and ramping up the output addressing the supply constraints. In commercial vehicles, the company will focus on increasing market share further with specific focus on SCVs. In Passenger Vehicles, Tata Motors plans to enhance the sales momentum by leveraging its front end.
Guenter Butschek, CEO and MD, Tata Motors, said, “The auto industry witnessed a strong sales momentum in Q3FY21, driven by the pent-up demand and a steady recovery of the economy. We could leverage the improved demand by a consistent ramp-up of production, addressing supply chain bottlenecks. Due to a strong festive season and a clear preference for personal mobility the PV business posted its highest sales in last 33 quarters. In the CV business the M&HCV and ILCV segments led the overall CV growth of over 48 percent higher domestic sales compared to the previous quarter. We improved our operational and financial performance by reducing costs, generating free cash flows, providing ‘best in class’ customer experience. Despite the current global challenge of semiconductor supplies, we are confident of keeping our performance improvement on track in this quarter to close the year on a high for an even stronger play in FY2022.”
Jaguar Land Rover sees recovery in sales
Tata Motors owned Jaguar Land Rover saw significant improvement in sales. Q3 retail sales were at 128,469 vehicles, up 13.1 percent compared to Q2 but still 9 percent lower than pre-Covid levels a year ago. Sales in China, one of its key markets, were up 20 percent sequentially. Most other regions also witnessed a sequential recovery though still below prior year. Sales of the new Land Rover Defender grew 66 percent to 16,286 units quarter on quarter. This performance was mostly on the back of favourable sales mix, cost performance and partial reversal of prior period reserves for emissions and residual values.
Jaguar Land Rover remains encouraged by the Brexit trade deal agreed in December between the UK and the European Union. This has avoided the risk of tariffs on automotive parts and finished vehicles, although there will still be increased customs administration requirements. Offering an outlook for the future, the company continues to expect to generate strong EBIT margins and positive free cash flow in Q4 FY2021 despite the external challenges. It targets achieving positive free cash flow in subsequent years, reduce net debt and increase financial resilience.
The recently appointed Jaguar Land Rover Chief Executive Officer, Thierry Bolloré said, “I am encouraged by the improved financial performance in this first full quarter as CEO of Jaguar Land Rover. This performance is a credit to the outstanding efforts of the employees of Jaguar Land Rover to overcome many challenges this year. Looking ahead, these challenges continue, including the Covid pandemic and its impact on the global economy, the UK’s new trading relationship with the EU and the significant technological changes taking place in the automotive industry. In this environment, I’m working with my management team on plans to realise an exciting future for Jaguar Land Rover, which I look forward to sharing in due course.”
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Newsmaker of 2020: Thierry Bollore