MUMBAI (NewsRise) -- Luxury carmaker Jaguar Land Rover posted its second straight monthly sales decline in U.S., adding to the worries of parent Tata Motors. Jaguar Land Rover sold 8,485 cars and SUVs across North America in June, down 9% from the year-earlier period, it said in a statement. Sales volumes of Land Rover fell 6% on-year to 6,593 vehicles, while that of Jaguar slumped 20%.
"After setting record sales in previous years, we are beginning to see the industry soften," said Joe Eberhardt, president and chief executive of JLR North America. "But (we) are confident that with our robust product offering, we are in a position to maintain our sales momentum."
Automobile sales in the U.S. showed a mixed trend last month, with SUVs continuing to draw consumer interest, while passenger cars further sliding, Reuters reported. Car sales have been hit by high interest rates while a number of cars coming off vehicle leases also damped demand, it added.
JLR's weak monthly sales in the U.S. also comes in the backdrop of simmering problems at the British car maker, which has been witnessing a slowing demand major markets, especially in China. JLR accounts for almost half of the Mumbai-based Tata Motors' unit sales and 75% of its total revenue.
After years of good growth, JLR's retail volume growth in China turned negative in May 2018 and has been declining at high double-digit rates since last July.
The marquee brand is also facing weakness from a demand slowdown in Europe and the U.K., hit by tougher emission rules, as well as the company's new electrification plans.
The company said it will introduce a portfolio of electrified products across its model range in the coming years, embracing fully electric, plug-in hybrid, and mild hybrid vehicles, as well as continue to offer ultra-clean gasoline and diesel engines.
Lower incentives offered by the automaker also hurt demand. Incentives at JLR dropped 20% sequentially, Nomura said, adding that Jaguar saw a 10% decline, while Land Rover posted a 28% slump. Higher incentives at other luxury rivals Mercedes Benz, BMW, and Audi helped improve their monthly sales volumes in June.
Nomura expects JLR's sales volume to grow 6% in this fiscal year, led by the launch of new Range Rover Evoque variants and a new Defender.
The troubles at JLR last month prompted Moody's Investors Service to downgrade credit ratings of Tata Motors and JLR.
The slump in demand had, earlier this year, forced JLR to cut 10% of its workforce and revamp its operations. In February, Tata Motors posted its biggest loss in India's corporate history of $4 billion due to an impairment at JLR.
In April, the company said it expects JLR to eventually return to profitability on the back of cost cuts and a recovery in Chinese demand. But it warned that the cash flow for JLR would be negative till fiscal 2021.
Tata Motors rose 1.8% in Mumbai trading on Thursday, while the benchmark S&P BSE Sensex ended 0.2% higher.
--Dhanya Ann Thoppil