Shares of Tata Motors Limited (NYSE: TTM), a global automotive company known also for its Jaguar and Land Rover brands, jumped over 12% higher early Tuesday morning on news of a program in India designed to boost car sales.
Investors might remember the “cash for clunkers” program with similar intentions to drive vehicle sales in the U.S. market, and India’s own program details are set to go public within a couple of weeks. Broadly speaking, the program is intended to spur 10 billion rupees, or about $1.4 billion, in new investment and also create as many as 50,000 jobs. The vehicle scrapping program will likely involve private vehicles 20 years or older and commercial vehicles 15 years or older, and it should certainly foster sales of newer and more environmentally friendly vehicles. Despite Tata Motors dealing with pandemic-related disruptions, the company recently posted a solid third quarter, has seen its stock price surge nearly 150% over the past three months, and would certainly stand to benefit from a program that should boost sales in India.