Jaguar Land Rover poised to “make in India, export to the emerging world”

Jaguar Land Rover sells around 250,000 Land Rovers and about 55,000 Jaguars worldwide.  In 2011/12 this generated about £13.5 billion sales with a profit of £1.5 billion.  They will spend around £2 billion in the 2013 financial year on new products including a new £350 million engine plant in the West Midlands.

JLR’s Strategy (Sustainability Report), JLR Strategy, states:

In 2011 we expanded assembly operations into India, one of our key markets, and announced plans for our first manufacturing facility abroad in another key market, China, through a joint venture with Chery Automobile Company Ltd. We predict Jaguar Land Rover sales will more than double in volume by 2020, largely due to increasing demand in emerging markets.

Now Reuters reports that the emerging market strategy is progressing fast and that JLR is poised to move from just assembly to the complete manufacture of some brands in India. They join the growing number of players who now see India as a sort of export hub to emerging markets.

Jaguar Land Rover (JLR) is investigating the potential of manufacturing cars in India, company sources said, as the British luxury carmaker looks to build on its growth in emerging markets with the help of Indian parent Tata Motors.

JLR, which has ridden a wave of surging demand in China and other emerging markets to post record profits over the past year, is “actively exploring the possibility” of building cars from scratch in India, said one company source.

“The idea is being looked into, with the (Jaguar) XF and (Land Rover) Freelander the obvious candidates,” said another source with knowledge of the matter.

The British brands, which already assemble two models in India using parts and engines shipped from factories in the UK, will also begin assembling its popular Range Rover Evoque in the country soon, the first source said without providing details.

Building cars in India, which has developed into an emerging market export hub for many global carmakers, would allow JLR to skirt high import taxes on luxury cars, which the country’s finance minister proposed raising to 100 percent from 75 percent in his budget speech last week.

… JLR will exhibit a new 9-speed automatic Evoque and an electric-powered version of its Land Rover Defender at the Geneva Motor Show next week.

Bought by Tata for $2.3 billion from Ford in 2008, JLR has defied those skeptical of its future under Indian ownership to roar back into profit over the past three years as the main growth driver for its now-struggling parent.

Continued growth in emerging markets such as India and China, which accounted for 22.3 percent of its sales in the December quarter, is key for JLR as it embarks on an expensive overhaul of its production and product clout. The carmaker is investing $1.7 billion with local partner Chery Automobile Co in a factory in China.

JLR lags rivals BMW AG, Volkswagen AG’s Audi and Daimler AG’s Mercedes-Benz in assembling cars in India, where the luxury market is expected to swell by around six times by 2020 to 300,000 cars a year, according to business consultancy Frost & Sullivan. ….

…. Earlier this year JLR started the assembly of the 2.2-litre diesel version of the Jaguar XF saloon at a plant in Pune, west India, tucked away in a corner of a sprawling production site where Tata builds its heavy duty trucks and hatchbacks.

Screwed together using engines and components shipped from JLR’s Castle Bromwich plant in Birmingham, central England, the company has also been assembling its Land Rover Freelander 2 in Pune since May 2011.

The XF and the Freelander 2 are JLR’s best-selling models in India, where it sold 2,288 cars in the year to March 2012, up 157 percent from the previous year. ….. 

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