Tata Motors shares dip on China woes

Shares in Tata Motors fell as much as 5.6% in intra-day trade on worries that China’s new stringent fuel economy standard would adversely impact
...
Landrover-Freelander
Landrover-Freelander

Shares in Tata Motors fell as much as 5.6% in intra-day trade on worries that China's new stringent fuel economy standard would adversely impact the Indian auto maker's Jaguar Land Rover Ltd (JLR) unit.

The slump in Tata Motors weighed heavily on the BSE Sensex, which fell on Thursday for a fifth consecutive session to its lowest close in nearly five months, while broader sentiment stayed weak because of concerns about political instability.

Trending Cars

Find more Cars

Tata Motors shares closed on the Bombay Stock Exchange at 273.75, down by 12.05, or 4.22%, from the previous close on the BSE.

China imposed long-debated stringent fuel economy standards on Wednesday, making life tougher for cash-strapped small domestic brands that are already struggling amid a slowdown of the world's biggest auto market.

The rules, jointly issued by five government bodies including the National Development and Reform Commission, would cut passenger cars' average fuel consumption to 6.9 litres per 100 kilometers by 2015 and down further to 5.0 litres by 2020.

China contributes about 20% of JLR's revenues and nearly 40% of its operating profit, analysts estimate, raising worries that the company may have to invest more to comply with the new norms.

"That's going to be tough for everyone, especially those small players as they will have to use more fuel-efficient engines and invest in hybrid technologies," said Yale Zhang, director of Greater China vehicle forecasts at consultancy CSM Worldwide.

First Published Date: 21 Mar 2013, 23:19 PM IST
NEXT ARTICLE BEGINS

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city

Want to get the best price for your existing car?

Powered by: Spinny Logo
By clicking "View Offers" you Agree to our Terms and Privacy Policy
Dear Name

Please verify your mobile number.

+91 | Choose city
Couldn't verify the OTP.
It's either expired or it's incorrect.