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We hosted the senior management of Tata Motors in Europe last week. Please
find key takeaways:
Management is upbeat on the ‘Evoque’: Management highlighted that the
Range Rover Evoque has received an encouraging response with prebookings
at 25,000 units already. They believe the product has a potential to
achieve annual sales of c.80K – 100,000 units.
Scale up plans in China, MOU with a local partner: JLR has been a late
entrant in China and hence is currently scaling up the distribution network
there. Currently, they have c.80 dealers, which they intend to raise to c.100
in the near term. Management recently signed an non binding MOU with a
local Chinese manufacturer. Talks to set up manufacturing facility are at an
initial stage and it will take a while to sign off with the JV partner, obtain
regulatory approvals and set up facility to commence production.
Developed market environment is uncertain: Management highlighted
that sales in Western Europe are weak; however the environment in the US
is currently stable and discounts are at normalized levels.
Domestic business outlook is mixed: On the India business, they expect
strong sales growth for LCVs to sustain while growth rates for M/HCVs
will be modest. On the passenger segment, management is revamping the
distribution network of the Nano, which includes setting up dealerships in
rural India.
Balance sheet: The company is well funded currently and intends to meet its
capex programs from internal accruals. They highlighted that the capex
programs are flexible (currently at GBP 1.5B p.a.) and could vary given
worsening in the external environment.
Outlook: We believe that the management is cautiously optimistic on the
growth outlook. They have a well diversified product / geographic mix,
which will enable them to better withstand the current cycle. Please see our
earlier note:
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We hosted the senior management of Tata Motors in Europe last week. Please
find key takeaways:
Management is upbeat on the ‘Evoque’: Management highlighted that the
Range Rover Evoque has received an encouraging response with prebookings
at 25,000 units already. They believe the product has a potential to
achieve annual sales of c.80K – 100,000 units.
Scale up plans in China, MOU with a local partner: JLR has been a late
entrant in China and hence is currently scaling up the distribution network
there. Currently, they have c.80 dealers, which they intend to raise to c.100
in the near term. Management recently signed an non binding MOU with a
local Chinese manufacturer. Talks to set up manufacturing facility are at an
initial stage and it will take a while to sign off with the JV partner, obtain
regulatory approvals and set up facility to commence production.
Developed market environment is uncertain: Management highlighted
that sales in Western Europe are weak; however the environment in the US
is currently stable and discounts are at normalized levels.
Domestic business outlook is mixed: On the India business, they expect
strong sales growth for LCVs to sustain while growth rates for M/HCVs
will be modest. On the passenger segment, management is revamping the
distribution network of the Nano, which includes setting up dealerships in
rural India.
Balance sheet: The company is well funded currently and intends to meet its
capex programs from internal accruals. They highlighted that the capex
programs are flexible (currently at GBP 1.5B p.a.) and could vary given
worsening in the external environment.
Outlook: We believe that the management is cautiously optimistic on the
growth outlook. They have a well diversified product / geographic mix,
which will enable them to better withstand the current cycle. Please see our
earlier note:
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