Tata Motors to benefit from tax cuts in China? Zee Business Kushal Gupta explains

Tata Motors shares fell today with the weakness of the market. Despite this, there is good news for the company in the international market. What is this good news for Tata Motors? What is the connection between Tata Motors and China? Zee Business Kushal Gupta's report

Gupta said that the good news that is coming for Tata Motors is that a tax deduction has been announced for the auto sector in China on Monday. The State Council of China has announced a relief package of USD 21 billion. Out of which relief of about USD 9 billion accounts for the purchase tax cuts, Gupta said. This component is of approx. 42 percent of the total stimulus.

He further said that as a result of this tax cut, there is likely to be demand for more than 18 lakh ICE (Internal Combustion Engine) cars. So this is a very positive demand trigger for Tata Motors, he added.

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क्या है टाटा मोटर्स के लिए अच्छी खबर?
क्या है टाटा मोटर्स और चीन का कनेक्शन?

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In fact, in April, when Shanghai was under lockdown, production was impacted here in a big way, for Tata Motors and the industry, Gupta added. But now after the announcement of this tax cut, there can be a big gain for Tata Motors because 60-65 percent of their revenue comes from their JLR sales. 

And out of that, China contributes 25-30 percent in JLR volume. So this announcement can be seen to be a big trigger point for Tata Motors, he said.