Tata Boosts Spending for New Jaguar, Land Rover Models

India's Tata Motors Ltd. says it will invest £2 billion (€2.5 billion) in new products for its Jaguar and Land Rover luxury brands, up from £1.5 billion (€1.9 billion) in 2011.

The U.K.-based Jaguar Land Rover unit accounted for a big chunk of Tata's profit over the past year, including pretax income of £530 million (€662 million) in the fiscal fourth quarter ended March 31. JLR earned £299 million (€373 million) in the same period of 2011. The unit's revenue soared 52% to £4.1 billion (€5.2 billion) as sales advanced 48% to 98,000 vehicles.

Analysts were disappointed that JLR's operating margin narrowed to 14.6% in the latest quarter from 17% in the three months ended Dec. 31. The unit attributes the margin decline to the expense of training new workers and higher marketing costs.

Tata posted net earnings of 62 billion rupees (€890 million) in the fourth quarter compared with 26 billion rupees (€376 million) a year earlier. Revenue climbed 44% to 509 billion rupees (€7.3 billion) on sales of 268,100 passenger and commercial vehicles.

For the full fiscal year, JLR pretax profit jumped 34% to a record £1.5 billion (€1.9 billion). Revenue rose 37% to £13.5 billion (€16.9 billion). Sales grew 29% to a record 314,400 vehicles, including a 76% surge to 51,000 units in China.

Tata netted 135 billion rupees (€1.9 billion) for the year, up 47% from the previous year. Revenue increased 36% to 1.7 trillion rupees (€23.6 billion) on sales of 863,200 vehicles.