India's top vehicle maker, Tata Motors, swung to a quarterly profit today from a year earlier loss, driven by sales of luxury Jaguar and Land Rover cars as well trucks in its Indian domestic market.
The company posted a consolidated net profit of 19.88 billion rupees ($422m) in the three-months to June, strongly beating forecasts. This compared to a net loss of 3.28 billion rupees the same time a year ago.
Analysts had expected the company to show a quarterly profit of 10 billion rupees. Quarterly sales jumped 64% to 268.76 billion rupees, the company said. The latest figures include sales of Jaguar and Land Rover vehicles.
'Overall economic growth, robust industrial production and availability of liquidity led to strong domestic demand in the quarter, resulting in volume growth for all vehicles,' the company said.
Jaguar and Land Rover posted a pre-tax net profit of 15.9 billion rupees for the April-June quarter as sales volumes rose 58% to 57,153 units for the two luxury brands.
Sales of the two prestige brands were severely hit by the global economic slowdown after Tata Motors bought the carmakers from Ford for $2.3 billion dollars in 2008.
Car sales in India have been on an upswing in the past year, posting a record monthly peak of 158,764 units in July, industry data showed this week, led by new model launches and cheap finance.
India is emerging as a popular destination for foreign car makers, as growth in Western developed markets has decelerated in recent years. Small car sales are the highest and represent more than two-thirds of India's market, driven by rising middle-class incomes.
Analysts forecast Indian car sales will keep growing with the country's looming festival season which peaks in early November with Diawali, the Hindu Festival of Lights, when it is considered auspicious to make purchases.
Tata Motors commands a 61% share of the commercial vehicle market and has a 13.3% share of the passenger car segment in which Japanese-owned Maruti Suzuki is the leader.
