Maintain ‘buy’ on Tata Motors, target Rs 476: Nomura

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Published: January 9, 2016 12:05:28 AM

Jaguar Land Rover Automotive's (JLR) – which is owned by Tata Motors December 2015 US retail sales continued to remain strong at 9,638 units, up 29.6% y-y.

Jaguar Land Rover Automotive’s (JLR) – which is owned by Tata Motors December 2015 US retail sales continued to remain strong at 9,638 units, up 29.6% y-y. The key driver was Land Rover with volumes at 8,441 units, up 47% y-y, while Jaguar volumes declined 29% y-y to 1,197 units. In Land Rover, Discovery Sport continued to ramp up well at 1,674 units.

Other models (Range Rover and RR Sport) also reported strong 24%/10% y-y volume growth respectively (Fig. 2). For other luxury OEMs, Audi/Mercedes reported a modest 6%/2.6% y-y growth while BMW reported 16% y-y decline. Overall, the industry was up 9% y-y for the month. Note that there were 2 extra selling days in December 2015 compared to last year, adjusted for which JLR’s growth would have been lower at ~20% y-y.

Average incentive levels declined for most OEMs. JLR’s incentives declined 28% y-y while, for other luxury OEMs, incentive levels declined by 19%/21%/7% for BMW/Mercedes/Audi, respectively. Overall, the numbers continue to remain healthy. While Land Rover continues to do well, we expect Jaguar volumes to improve as the company introduces Jaguar XE and Jaguar XF refresh from 4QFY16.

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