Tata Motors :JLR US retail sales up 36% y-y: Nomura Research

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JLR US retail sales up 36% y-y led by strong growth in Range Rover

models

JLR’s Mar-15 retail sales volume in the US came in at 8,438 units, up 36%

y-y. Jaguar volumes declined by 9% y-y while Land Rover volumes were up

54% y-y. In terms of models, Range Rover volumes were up 151% and RR

Sport volumes were up 51%. Even LR4/LR3 volumes were up quite

significantly. Strong growth in the RR and RR Sport models augurs well for

product mix and profitability as well, in our view.

Note that Freelander (LR2) volumes were down 97% y-y as inventory is

being cleared ahead of the commencement of deliveries of the Discovery

Sport. We estimate this would have affected growth by ~4% y-y.

For other luxury OEMs – volumes were up by 7% y-y for BMW, 20% y-y for

Audi, and 10% y-y for Mercedes. Note that there was one less selling day in

Mar-15 vs Mar-14, which we estimate had a ~4% negative impact on growth

for all OEMs.

Incentives up 8% y-y for JLR, vs up ~12% y-y for other luxury OEMs

JLR’s incentives increased by 8% y-y (9% m-m) to USD1,910/vehicle; up

59% y-y for Jaguar, while the LR brand saw a 4% y-y decline. For other

luxury OEMs, incentive levels on an average were up by ~12% y-y.

Expect marginal positive stock reaction to these numbers

In our view, this is a very strong set of numbers – we have been highlighting

over the past few months that Land Rover volumes in the US have been

affected by capacity constraints (due to addition of assembly line for Jaguar

XE) rather than demand pressures. We expect volume performance to

improve further over the next few months with the Discovery Sport launch.

There could be some positive stock reaction on these volumes.