Tata Motors falls 6% on China's new fuel norm worries

Mumbai: Shares in Tata Motors fell as much as 5.6 percent on worries that China’s new stringent fuel economy standard would adversely impact the Indian auto maker’s Jaguar Land Rover(JLR) unit.

[caption id=“attachment_669862” align=“alignleft” width=“380”] China contributes about 20 percent of JLR’s revenues and nearly 40 percent of its operating profit. Reuters[/caption]

The rules announced on Wednesday would cut passenger cars’ average fuel consumption to 6.9 litres per 100 kilometres by

2015 and to 5.0 litres by 2020 in China. A spokesman for Jaguar Land Rover could not immediately comment when reached by Reuters.

China contributes about 20 percent of JLR’s revenues and nearly 40 percent of its operating profit, analysts estimate,

raising worries that the company may have to invest more to comply with the new norms. News that BMW budgeting for more discounts in 2013 was also seen affecting the stock.

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Tata Motors shares down 3.5 percent at 0802 GMT.

Reuters