March 21, 2013 / 8:18 AM / in 5 years

Tata Motors slumps on fears of China's fuel norms

MUMBAI (Reuters) - Shares in Tata Motors(TAMO.NS) end down 4.22 percent after falling as much as 5.6 percent on worries that China’s new stringent fuel economy standard would adversely impact the auto maker’s Jaguar Land Rover Ltd (JLR) unit.

Men walk inside a Tata Motors showroom on the outskirts of Agartala, capital of Tripura, November 7, 2012. REUTERS/Jayanta Dey/Files

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 (BMWG.DE) budgeting for more discounts in 2013 was also seen affecting the stock.

Reporting by Abhishek Vishnoi

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