Tata Motors falls 9% in three-days as JLR cuts prices in China

Tata Motors is trading lower by 2.3% at Rs 443, extending its past two-days fall, on reports that Jaguar Land Rover (JLR) has reduced its prices on three of its high end models in response to an pricing and anti-monopoly investigation in China.

The stock has declined nearly 9% in past three trading sessions from Rs 486 on July 24 on National Stock Exchange, compared to 1.1% decline in benchmark CNX Nifty.

Prices of the Range Rover V8, Range Rover Sports V8 and Jaguar F-Type will be reduced by an average of 200,000 yuan (Rs 20.4 lakh) from August 1. Every fourth car made by Jaguar Land Rover is sold in China, the Business Standard report suggests.

According to Sahil Kedia and Ashish Parasrampuria analysts at Barclays, while the pricing reduction (Avg of RMB 0.2mn/vehicle effective 1 Aug 2014) is limited to the V8 engines across 3 models; it does raise uncertainty around future pricing of models.

“We keep our estimates and ratings unchanged as we assess potential implications”, says analysts in a research note.

The stock opened at Rs 455 and has seen a combined 3.35 million shares changing hands on the counter so far on NSE and BSE.

Tata Motors