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Tata's Jaguar Land Rover posts record February sales in U.S.

MUMBAI (NewsRise) -- Jaguar Land Rover, the luxury automaker owned by India's Tata Motors, said U.S. sales jumped 16% in February to a record for the month, helped by rising demand for new Jaguar models F-PACE and XE.

Jaguar Land Rover sold a total of 9,231 cars and sport utility vehicles in the U.S. last month, making it the best-ever February sales for the British company, it said in a statement on Wednesday. Industrywide car sales in the U.S. have been gaining in recent months as automakers offer discounts and incentives to clear inventory.

JLR's performance outpaced the broader U.S. auto industry, whose annualized growth pace slipped 0.6% last month, Reuters reported citing Autodata.

Jaguar sales more than doubled to 3,484 units in February. It sold 993 units of Jaguar XE and 1,596 units of F-Pace, making it the brand's volume leader.

However, demand for the Land Rover continued to decline, after volumes had jumped last year.

Land Rover sales fell 10% to 5,747 vehicles last month. The Range Rover Sport was "the volume leader" for the brand, hitting 1,824 units in sales.

"Land Rover is coming off record 2016 sales and getting ready for the launches of the Land Rover Discovery and Range Rover Velar coming later this year," Joe Eberhardt, president and CEO, Jaguar Land Rover North America, said in the statement.

Mumbai-based Tata Motors had acquired the luxury automaker, which competes with brands such as Audi, Mercedes-Benz and BMW, from Ford Motor in 2008 for $2.5 billion. The luxury unit accounts for more than half of Tata Motors' revenue and nearly 90% of its operating profit.

The U.S., which accounts for 20% of JLR's sales, has been a major driver for the car maker's growth in the last few years.

Analysts say the prospects of luxury car makers, including JLR, are vulnerable to a proposal by the new U.S. administration to introduce a Border Adjustment Tax to curb imports. The new proposal does not consider imports of components or vehicles from foreign sources an expense, making taxable income significantly higher. A sharp rise in taxes will drive up the prices of vehicles, affecting demand.

"JLR would be able to increase prices by up to 10% without any negative impact on volumes on account of its luxury positioning and likely price hikes by peers," Deutsche Bank said in a report last month. "Beyond 10%, we have assumed that JLR would face negative demand elasticity."

Tata Motors shares gained 2.76% in Mumbai trading on Thursday, while the benchmark S&P BSE Sensex index lost 0.50%.

--Dhanya Ann Thoppil

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