MUMBAI: Chinese demand for its luxury Jaguar Land Rover (JLR) models propelled fourth-quarter net profit at Tata Motors', capping a bumper year for the Indian automaker.
China's boost to JLR's bottom line comes as global automakers, hit by sluggish sales in established markets such as Europe, shift their focus towards developing economies to drive future growth.
A one-off tax gain also contributed to Tata's 139 percent quarterly profit leap, which came in spite of a lacklustre performance at its core domestic business.
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| The Evoque has been a life-saver for JLR and Tata Motors. |
It also reported a rise in net profit to 135 billion rupees (RM7.7bil) for the year to March 31, from 92.7 billion (RM5.3bil) the previous year
JLR's growth in overseas markets it sells imports in India and recently began assembling some Land Rover models there has helped insulate Tata from a sluggish domestic car market which grew just 2.2 percent in the last financial year.
The British luxury brands, which Tata bought for US$2.3bil (RM7.3bil) in 2008, brought in more than 95 percent of its profit in the quarter to March 31, as sales grew by 48 percent.
Tata is focusing on markets such as Russia and China, as its domestic arm struggles with high costs and sluggish sales growth.
"We see very strong growth in China. The demand for our vehicles, especially the Range Rover and Range Rover Sport, is very high. If the dynamic continues, China will be our number two market," this financial year, JLR chief Executive Ralf Speth said.
Tata will invest 2 billion pounds (RM9.8bil) in JLR this financial year, up from 1.5 billion pounds (RM7.4bil) last year.
In March, it finalised a joint venture with China's Chery Automobile Co to make JLR vehicles in the world's largest car market.
China accounted for 17.3 percent of JLR sales in the year to end March, its fourth largest market.
The UK JLR's home market brought in 19.7 percent of sales while North America accounted for 18.5 percent. Europe was its largest market at 22.8 percent.
Part of the software to hotels Tata Group, India's largest business by revenue, Tata Motors said net profit for the fourth quarter to end March was 62.5 billion rupees (RM3.6bil), up from 26.2 billion (RM1.5bil).
India's biggest truck maker and the maker of the Nano, dubbed the world's cheapest car, Tata sparked fears it had bitten off more than it could chew when it bought the loss-making JLR brands from Ford Motor Co, given its minimal experience in international manufacturing and luxury products.
Yet the acquisition has fast overshadowed its parent.
Boosted by runaway demand for the Range Rover Evoque compact SUV launched last year, JLR's revenue grew 51.5 percent to 4.14 billion pounds (RM20.4bil) in the quarter to March.