Tata Motors foresees election impact on car sales in first half of FY25

Tata Motors expects a weakening of local demand for passenger vehicles (PVs) in the first half of fiscal year 2025, citing elections in the country as a contributing factor, according to its finance chief.

The country’s third-largest carmaker by sales, known for its popular SUVs such as 'Nexon' and 'Punch', along with a dominant position in electric vehicle sales, plans to evaluate demand post-elections, stated Chief Financial Officer P B Balaji in response to a Reuters' query.

With elections spanning from mid-April to early June, the company expects a period of uncertainty that could impact automakers' sales in May, as noted earlier this week by a dealers' body. It is projected that passenger vehicle sales growth will slow to 5 per cent in fiscal year 2025 from the previous year's 8.4 per cent growth.

Despite the anticipated slowdown in the first half, Tata Motors foresees a "better" second half with "decent" PV sales growth.

The outlook for luxury vehicle sales remains positive for fiscal year 2025, benefiting Tata Motors' subsidiary, Jaguar Land Rover (JLR). JLR, which contributes two-thirds of Tata Motors' consolidated revenue, has witnessed a turnaround in profitability, focusing on margin-boosting luxury SUVs such as the 'Range Rover Sport' and 'Defender'.

Tata Motors expects JLR's earnings before interest and taxes (EBIT) margins in fiscal 2025 to be comparable to the 8.5 per cent achieved in the previous fiscal year, with a target of exceeding 10 per cent by fiscal 2026.

In the quarter ending March 31, Tata Motors' consolidated net profit more than tripled from the previous year to Rs 17,407 crore, attributed to a surge in tax credit and robust sales of JLR's SUVs.

(With Reuters inputs)