Tata Motors chairman Cyrus Mistry on Thursday said the Chinese market will remain under pressure in the current fiscal year and an increasing vehicle manufacturing in China will act as natural hedge against the devaluation of yuan.
Mistry was addressing shareholders at the company’s annual general meeting.
The slowdown in the Chinese economy has adversely impacted the prospects of the company as sales of most of the products especially the locally manufactured Evoke slumped in the first the quarter of the fiscal. Net profit of the company decreased by 48.9% year-on-year as sales of premium cars slowed down in China.
In volume terms, the share of the Chinese market in JLR’s total volumes has decreased from 14% to 21% in the April-June quarter. The phasing out of the Land Rover Freelander to make way for the Discovery Sport and the low demand for locally manufactured Evoke has put JLR under pressure in the market.
The price of the Evoke was slashed substantially by the company. The Chinese market used to contribute 25-27% of the total volumes of the British carmarker. Market experts say the introduction of the Land Rover Discovery Sport and Jaguar XE will boost the volumes of JLR in the days to come.
Though there is nothing to cheer about the China market, the volumes in the US and Europe have showed signs of growth. “Tata Motors expects auto market in the US and Europe to recover further this year,” Mistry said.
The Tata Sons chairman conceded the road ahead for Tata Motors will be challenging and the company is planning to have 15,000 mobile service stations in the domestic market.
Tata Motors had announced that there will be two launches in the passenger vehicle segment every year till 2020.