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Jaguar Land Rover US sales fall, adding to parent Tata Motor's woes

Weak US sales follow slowing demand in China and Europe

MUMBAI (NewsRise) -- Jaguar Land Rover, owned by India's Tata Motors, saw its sales in the U.S. fall in March, underscoring the persistent weakness in demand that has hurt the British luxury carmaker.

Jaguar Land Rover sold 13,171 cars and SUVs across North America, compared with 14,232 units in the year-earlier period, it said in a statement on Tuesday. On a sequential basis, however, the company saw sales improve more than 13% in March.

Sales volume of Land Rover fell 13% on the year to 9,492 vehicles, while that of Jaguar grew 13% on the back of F-Pace and E-Pace models.

The weak monthly sales come barely days after the luxury carmaker said it expects the financial performance in the fourth quarter to improve from the first nine months of the year, with significant positive cash flow.

In February, Tata Motors reported a quarterly loss of about $4 billion, the biggest ever in Indian corporate history, as shrinking China sales took a toll. The company also warned that JLR would swing to an operating loss in the year ended in March, having previously predicted it would break even.

S&P Global Ratings downgraded Tata Motors and its unit to junk last month, and put it on review for further downgrade amid macroeconomic uncertainties. On Friday, the company expressed disappointment over S&P's decision, saying JLR is continuing to execute its product plans and turnaround strategy to deliver 2.5 billion pounds of cash flow improvements by March 2020.

JLR's weak U.S. sales come at a time when the Tata Motors unit continues to struggle with slowing demand in its major markets, such as China and Europe. The company's sales in China have been dampened by the country's trade tensions with the U.S. and an economic slowdown, while demand in Europe and the U.K. were hit by tougher emission rules. JLR accounts for more than half of the Mumbai-based parent's total revenue and nearly 90% of its operating profit.

The slump in demand has forced the automaker to cut 10% of its workforce earlier this year. Britain's largest carmaker has been persistently slashing its production schedule as uncertainty mounts over the U.K.'s proposed exit from the European Union.

The impending exit, marking one of the biggest policy shifts for the region in half a century, has been overshadowed by concerns about Britain leaving the bloc without a trade agreement in place.

Tata Motors lost 0.8% in Mumbai trading on Wednesday, while the benchmark S&P BSE Sensex ended 0.5% lower.

--Dhanya Ann Thoppil

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