Europe drives JLR volume growth

It has seen a 31% growth in sales from last year, driven by success of the XE and Discovery Sport models

A changing product mix and fear of a sharp slowdown in China sales have weighed on Jaguar Land Rover (JLR), the luxury brand of Tata Motors.

However, the company's February sales suggest some of the worry might be exaggerated, as it has seen a 31 per cent growth in sales from last year, driven by success of the XE and Discovery Sport models.

While demand in China has been weak for the company over the past couple of quarters, markets in Europe are showing healthy growth. In February, JLR sales grew 84 per cent in Britian and 53 per cent in the rest of Europe. Volumes in North America grew 27 per cent. Those in China grew 14 per cent, against the estimated 30 per cent. However, strong growth in other markets have offset the slower growth in China,. Kotak Institutional Equities expects retail volume growth in China to improve over the next few months, led by a weaker base and ramp-up of local production of the Discovery Sport.

JLR has been churning its product portfolio and replacing some of the older models with new launches. In the process, volumes have been volatile in some markets, where it has phased out some models; with the new launches, the volatility has come down.

Analysts expect sales of both the Discovery Sport and Jaguar XE to be strong in the coming months. Volumes of the Evoque and Jaguar XF declined ahead of the launch of the new Jaguar XF across markets. The Range Rover Sport and Defender also saw decent volume growth.

Analysts believe JLR will continue to report healthy volume growth across markets, on the back of new launches.