At this point, even analysts in Mumbai are no longer bothering to factor Tata Motors’ ultra-cheap Nano cars into their earnings models. It is all about arguing over developments at the luxury side of the company.
The dispute is rooted in fine degrees of interpreting how well Tata’s high-end Jaguar Land Rover unit is doing overseas. In their most recent notes on the company, neither firm mentioned the low-cost Nano at all.
Ambit was duly impressed to see JLR ship 42% more cars in September on an annualized basis, largely on the strength of Land Rover’s extremely successful launch of the Evoque and diesel models.
However, they are not enthusiastic about the health of the Western car markets where JLR derives 60% of its revenue.
And while Land Rover is becoming a popular brand in Russia, Ambit simply does not see the growth opportunity as sustainable here.
Even in China, they note, JLR is picking up share of luxury markets that were previously the domain of German competitors.
Granted, the Land Rover brand in China is growing off a minuscule base, but it is definitely growing faster than its peers.