JLR and Tata Motors assigned high-end ratings by Fitch

According to the recent updates in automobile industry, India based Tata Motors Ltd (TML) and its subsidiary - UK based automobile giant Jaguar Land Rover Plc (JLR) acquired the Long-term Foreign Currency Issuer Default Ratings (IDR) of 'BB-' and 'BB', by Fitch Ratings respectively.

In terms of rating, the Fitch’s 'BB' rating signifies the low credit risk as compared to other issuers or issues and it is covered under analytical grade system.Moreover with the stance on IDRs being secure, Fitch has provided rating of Land Rover a bit less than that of Tata Motors, which in turn reflects ideal associations between the two automobile giants.

As per sources, the company officials stated that they believe that JLR is quite decisive to Tata Motors, which is also indicated in its percentage of EBITDA contribution and the cooperation provided by Tata Motors since the takeover in FY09.The rating of TML provided by Fitch Ratings Company also signifies that the automobile company is holding good share in the Indian automobile market accompanied by steep increments in margins and complete control over the financial year.

Fitch Ratings said that the developments in the Tata Motors ltd were backed by the perfect execution of its strategies at jaguar Land Rover Plc. Also the company stated that for the period of April-December, 2010, the JLRs contribution to TML's combined revenues and net profits were 58 per cent and 81 per cent, respectively.

If speculations are to be believed TML's rating is backed by its promising prospects on the Indian auto industry and as per Fitch's anticipation, the high-end car manufacturing companies in Europe will surpass volume segment players within the coming two years.

Furthermore, it is known that Jaguar Land Rover is renowned brand name in developed and emerging markets. Also the company holds energetic design teams accompanied with its eagerness for complying with the tough emission rules, manufacturing ability. However, the following features are the main constituents of the rule on which rating is based.