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Tata Motors shares were down 6.58% to Rs 289.10 at 12.25 pm on the NSE

Tata Motors Ltd. fell as much as 8.2% after earnings at the owner of Jaguar Land Rover missed analysts’ estimates amid sluggish demand for its luxury cars in Europe.

Shares of the country’s biggest automobile company were down 6.58% to Rs 289.10 at 12.25 pm on the National Stock Exchange (NSE), heading to the lowest close since February 2016. Jaguar Land Rover said it will spend about 4.5 billion pounds ($5.3 billion) in the current financial year on new models and technologies as it looks to spur sales that grew at a slower pace.

Deliveries at Jaguar Land Rover rose 1.7% in the year through March, with demand for newer models such as the Jaguar E-Pace compact sport utility vehicle and Range Rover Velar failing to offset a sales drop in older models. Jefferies said it is cutting its volume growth estimates for the unit to reflect near-term weakness in key markets the UK, Europe and the US. Jefferies also reduced its margin estimates.

Tata Motors net income fell 51% to Rs 21.3 billion ($311 million) in the three months ended March, a steeper decline than analyst estimated. Profit before tax at Jaguar Land Rover dropped 46% to 364 million pounds in the period.

The investment push comes at a time when China has announced it will cut import duty on passenger cars to 15% from 25%, granting foreign carmakers further access to the world’s largest auto market. The luxury-car unit spent 4.2 billion pounds in the year ended March 31.

“We will continue with over-proportional investment in new vehicles, manufacturing facilities and next generation automotive technologies in line with our autonomous, connected, electric and shared strategy,” Chief Executive Officer Ralf Speth said in a statement Wednesday.

While the Chinese market is providing sales traction for Jaguar Land Rover, growth has slowed over the past year, Debjit Maji, an analyst at Kolkata-based Stewart & Mackertich Wealth Management Ltd., said before the results. “The recent announcement of reduction of auto import duty from the Chinese government is likely to augur well for JLR as it will bring down the prices of their products and make them more competitive, but it is true for its peers also.”

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