Indian carmaker Tata Motors Tuesday reported a 17 percent fall in quarterly profits, as the pound depreciated against the rupee following Britain’s vote to leave the European Union.
The company’s consolidated net profit for the three months ending March fell to 43.36 billion rupees ($668.72 million) from 52.11 billion rupees a year earlier, the Mumbai-based company said in a statement.
Jaguar Land Rover, one of Tata Motors’ key products, relies heavily on the UK market for its revenue and sales.
Since the “Brexit” referendum, the pound has fallen sharply against the Indian currency, down from over 100 rupees to 84.17 rupees.
“It has been a challenging and highly volatile year, which followed a period of low demand and inconsistent recovery in the prior years in the automotive sector in India,” the statement added.
Aside from the fall in the pound, the Jaguar Land Rover business saw “strong demand across the product portfolio primarily reflecting higher volumes in China, North America, UK and Europe,” the company said.
JLR retail sales were up 13 percent and sold 179,509 units for the quarter ending March, the company said.
Tata Motors in December witnessed a 96 percent fall in quarterly profits due to India’s cash ban that had rendered 86 percent of the country’s cash reserves “illegal and void” overnight.
“It’s not been a predictive year and the auto industry has been going through a challenging year,” said Abdul Majeed, partner at consulting firm PwC.
“The past year has seen a range of unexpected policies that impacted demand in the auto sector including a ban on large diesel vehicles, new, and more, stringent emission norms, demonetisation as well as Brexit, which have added to the sector’s problems,” Majeed said.
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