Tata Motors Ltd, which owns Jaguar Land Rover, on Wednesday said China’s luxury car market is experiencing stress amid challenges related to the availability of finance to dealers.
“On the Jaguar Land Rover Side, from a demand perspective, the market that we will watch like a hawk, is China where there is stress. Some of the industry numbers that have been reported are quite strong decline,” Tata Motors' Group CFO PB Balaji said.
He noted that the biggest challenge in China now is the availability of finance to dealers and there has been a shrinkage in the number of dealer outlets there.
The percentage of profitable retailers in China declined to 24% in the first of 2024 from 58% in the year-ago period while retailer insolvency has grown 22% to around 2,000, as per the company’s presentation.
China is a very important market for Jaguar Land Rover, where it operates with a joint venture with Chery Automobile. “We are obviously in a good position compared to the market. But that does not mean that we should be growing in the market,” he said.
However, Balaji noted that it is an industry-wide issue in China and a government stimulus with short-term actions to rebalance supply and demand is likely to improve the retailer’s situation there gradually.
“We are in a much better position as our inventory levels are very low, and customer attraction for our models are very good,” he added.
Meanwhile, Jaguar Land Rover is planning to revive its Freelander model in an electric avatar in China. The automaker has entered into a licensing agreement with Chery Automobile to manufacture electric models under the Freelander name.
The company expects the Freelander licensing to fuel growth going forward as its sees promising market potential in the nameplate.