 "JLR marks second straight fall in monthly sales")
Retail volumes of Jaguar and Land Rover (JLR) declined for the second straight month after the two Tata Motors-owned brands reported production issues related to transition to new models and stock clearance in its biggest market, China.
The two UK-based brands reported retail sales fall of 2% in October and November at 33,512 units and 36,621 units, respectively. Volumes of the Land Rover fell by 2%, while that of Jaguar were down by 4% last month.
In comparison, the retail volumes of Audi and BMW grew by 11% and 8%, respectively, during November. Volumes for Land Rover models such as the Range Rover Sport, Evoque and Freelander declined by 9%, 4% and 14%, respectively, y-o-y. Production of these models were affected as JLR started manufacturing the Discovery Sport at its Halewood plant where they also manufacture the Evoque and Freelander.
"The company is also clearing dealer inventory in China for the Evoque model before its China JV production starts in 4QFY15", a report from Kotak Institutional Equities stated.
Evoque retail volumes were down by 56% y-o-y in China in October 2014 as the company cleared its inventory before launching the Evoque from its China plant. The $1.8 billion joint venture plant, which has an annual capacity of 130,000 units, commenced production in October.
Volumes of the Jaguar appear weak because of poor offtake. However, analysts expect volumes to improve with the launch of the XE sedan slated for introduction next year.
"Jaguar volumes have been weak due to poor brand perception. The Jaguar XE launch in FY2016 will be critical to improve the brand's perception. Product mix is also likely to decline on a q-o-q basis in 3QFY14 due to lower mix of Range Rover and Range Rover Sports," the Kotak report added.