MUMBAI: The explosions that ripped through China's Tianjin port last week may have damaged many of the 5,800 Jaguar Land Rover vehicles parked in the vicinity, the British auto maker's Indian parent, Tata Motors, informed the Bombay Stock Exchange.
These vehicles, shipped to China recently, had been stored at various locations in Tianjin, the company said in a notice. "However, access to facilities near the site of the explosion remains restricted and so, whilst we believe many of these vehicles may have been damaged, we are presently unable to quantify the numbers of units affected," it said.
Tianjin is one of China's busiest ports and is preferred by foreign carmakers for importing cars into the country. Reports estimate that as many as 15,000 vehicles of auto makers such as Mitsubishi, Volkswagen, Hyundai Kia, Renault and JLR, worth about $1 billion (Rs 6,500 crore), were parked in the area for delivery. A large number of these vehicles were damaged in the deadly explosions. For JLR, the 5,800 vehicles damaged or stranded due to the accident would have accounted for a fortnight's supply in China, analysts said.
"We continue to work with the port authorities and once the site is reopened, we will be able understand the impact," JLR spokesman Del Sehmar said in an email response to queries from ET. "At present, it is too early for me to provide you with exact details and we will continue to monitor the situation." Tata Motors' shares slid more than 4% after the announcement, but pared the loss before closing 2.7% lower at Rs 332.75 on the Bombay Stock Exchange, where the benchmark Sensex ended 0.9% down.
Piyush Jain, auto analyst at MorningStar, said the financial implication to JLR would be as good as nothing, but vehicles getting stranded may impact short-term volume offtake at a time when the market itself is facing slowing growth.
In the luxury-car market, once a prospective buyer decides on which car or brand to go for, he usually sticks to it, Jain said. "If anything, the delay in supply may increase the waiting period, but it is hardly likely to impact the volume offtake."
Source: The Economic Times: Business News, Personal Finance, Financial News, India Stock Market Investing, Economy News, SENSEX, NIFTY, NSE, BSE Live, IPO News