Sept. 10 (Bloomberg) -- Carl-Peter Forster, chief executive officer of Tata Motors Ltd., owner of the Jaguar and Land Rover brands, has resigned after less than two years at the helm citing “unavoidable personal circumstances.”
Forster, who joined Tata Motors in 2010, will remain as a non-executive member on the company’s board, the Mumbai-based Tata Motors said in an e-mailed statement today. India’s biggest automaker by revenue hired Forster from General Motors Co. where he was head of European operations.
Tata Motors’ American depositary receipts plunged 9.2 percent to $15.35 yesterday in New York. Forster’s resignation is a “setback” as the company struggles to boost sales at home in India, while the debt crisis in Europe slows demand for Jaguar cars, according to Deepesh Rathore, managing director for IHS Automotive in India.
“He was one of the strong pillars for JLR,” said Pramod Amthe, an analyst with Royal Bank of Scotland Group Plc in Mumbai. “His exit as the head of the business is definitely negative. Investors may not get the same level of comfort they used to get from talking to Carl.”
Prakash Telang, managing director of the company’s Indian operations, and Ralf Speth, chief executive officer of Jaguar Land Rover, will represent their respective units on Tata Motors’ board, according to today’s statement.
“The board respects Carl-Peter’s personal circumstances that led to this move,” Chairman Ratan Tata said in an e-mailed statement today. “We would like to thank him for his contributions to the successful development of our company.”
World’s Cheapest Car
Passenger-vehicle sales at Tata Motors slumped 33 percent in August from a year earlier after India’s central bank raised its benchmark interest rate to 8 percent in July, the highest among Asia’s biggest economies.
Jaguar sales declined 23 percent to 4,372 in July, according to a company statement. Almost 25 percent of Jaguar and Land Rover sales come from the U.K., where the economy grew at the slowest pace in the second quarter since it contracted in the first three months of 2010. North America and Europe account for about 22 percent each of sales, according to a company presentation.
Deliveries of the Nano, the world’s cheapest car, plunged 85 percent to 1,202 units in August, Tata Motors said in a statement on Sept. 1. The Society of Indian Automobile Manufacturers said this week it may cut the industry’s sales forecast after economic growth slowed to the least in six quarters in the three months ended June.
Nano sales haven’t picked up, while “the Indica and Indigo brands are laggards in their respective segments,” said IHS Automotive’s Rathore. “A double dip in Europe will be catastrophic for Jaguar and Land Rover.” The Indica is a hatchback and the Indigo is a sub-compact sedan on the same platform.
Tata Motors shares declined 3.3 percent to 764.9 rupees at the 3:30 p.m. close in Mumbai. The shares have declined 42 percent this year, compared with a 18 percent decline in the BSE India Sensitive Index. Forster’s resignation was announced after market hours.
“I would expect Forster’s position to be filled up in the next two to three months if the company wants to keep their plans on track,” said Rathore.
Tata Motors bought Jaguar Land Rover from Ford Motor Co. in 2008 for $2.5 billion.
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