Tata Motors has cut its production, price and sales targets at its Jaguar Land Rover luxury brand in China, a top company executive said, as it is struggling with a slowdown in the market that is creating high inventories.
Economic Growth across China, the largest car market in the world, has slowed to a low of 25 years and a drop in confidence by consumers is hurting the sales of carmaker from General Motors to BMW.
Sales and production targets for the company were adjusted to reflect a slowing market, announced CFO C. Ramakrishnan on Friday after the company posted a quarterly profit that was close to 50% less that the same period a year ago.
The price and target cuts for JLR come weeks after other automakers like Ford, GM and BMW announced price cuts on Chinese models to combat the weak growth in sales.
The automakers association in China cut its forecast for sales growth in 2015 from 7% to 3%.
JLR should return to sales growth during its December quarter, which will be driven by new vehicle launches and as its management improves the brand awareness for the Evoque, said an analyst in the auto industry located in New Delhi.
Tata Motors’ posted net profit for its quarter of April through June that fell by 49% to just over 27.69 billion rupees or approximately $434 million, in comparison to the same period one year ago.
Analysts were expecting profits of 34.59 billion rupees. Net sales were down 6% to just over 601.8 billion rupees.
Sales for JLR in China dropped by one third to 21,919 vehicles during the three-month period, pulling down sales at the carmaker by 1%. Sales across Europe were up 28%.