Nissan Soaring, Jaguar Leaping
Sounds like the title of some epic Chinese historical movie, but these were in fact the headlines taken from various sources after both Nissan of Japan and Tata of India announced their results for the past quarter.
Nissan beat analyst forecasts by reporting some of the biggest quarterly profit gains in three years on the back of a weaker Yen, making exports more attractive and higher sales in China, the world’s largest car market. Profits for the quarter of October to December 2013 was USD824.73 million, an increase of 56.8% on the previous year.
Nissan, somewhat like the other Japanese car giants, Toyota and Honda, has been reaping the rewards from a resurgent sentiment in mainland China after the hostilities over the territorial dispute and has managed to claw back much of the losses. In fact, Nissan and Dong Feng, their local partner, managed to sell some 17.2% more vehicles than previously. Globally, Nissan, the owner of Datsun and Infiniti, sold some 5.1 million vehicles and is currently ranked as the second largest car manufacturer in Japan behind Toyota.
Coincidentally, Tata Motors of India announced its results on the same day and their third quarter profits had beaten analyst’s expectations with a profit of USD771 million. Most of this profit can be directly attributed to the phenomenal performance of Tata’s British-based Jaguar Land Rover (JLR) Group, which made a staggering USD1 billion profit on the back of sales that grew by a record 19% to 425 006 vehicles (see JLR Reports Record Breaking Sales).
This is good news for Tata who has been suffering of late. Sales of Tata passenger vehicles has dropped 37% in India and the lacklustre performance has been led by Tata Nano, which is now thought to be beyond salvage in some quarters (see Is Tata Nano Salvageable?). Sales in the trucks and bus division has also dropped by 25%, adding to their headache as the lustre has left the BRIC economies. The bad news on the sales front was added to the tragic news of the death of Karl Slym, the man who had been brought in to turn the company around and who fell to his death in an apparent suicide whilst on a company trip to Thailand.
To add injury to what should be a buoyant time at JLR, the American Consumer Reports magazine, the same one that recently promoted the combustible Tesla Model S to be the fifth best car in the United States of Americaland, has ranked the offerings from JLR as last in terms of quality and reliability, etc. Oops!