Tata Motors Profits Slide 30%

Increase in steel prices and domestic interest rates are factors

India's top vehicle maker Tata Motors, which this year bought Jaguar and Land Rover, on July 30 reported that quarterly profit fell 30%, hit by higher input costs. A sharp rise in domestic interest rates to battle inflation also hit demand for its trucks and cars.

Net profit for three months to June fell to 3.26 billion rupees (US$76 million) from 4.67 billion rupees a year earlier on revenues which rose 14.4% to 69.2 billion rupees, the company said.

Tata Motors sold 133,079 vehicles for the quarter, including exports, from 128,095 vehicles a year earlier.

Tata Motors' production costs have risen as a result of a rise in steel prices while official interest rates are at seven-year peaks.

Tata Motors, which earlier this year completed its acquisition of Jaguar and Land Rover from Ford for $2.3 billion, is set to launch the world's cheapest car at just 100,000 rupees (US$2,500). The launch of the Nano small car is expected later this year.

Copyright Agence France-Presse, 2008

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