Trade Analytics

Go Back

JLR plans to make Land Rover SUVs for Indian market

Economic Times:  September 05, 2016

MUMBAI: Jaguar Land Rover, the British luxury vehicle unit of Tata MotorsBSE 1.13 %, is planning to make Land Rover SUVs in India for the local market and exports.

JLR is discussing internally and also with component vendors about the possibility of making a mini version of the Defender in India by 2019-20, said three people with knowledge of the matter.

It currently has a facility on the outskirts of Pune to assemble luxury saloons and SUVs from imported kits. A manufacturing plant here will help improve the company's global footprint and efforts to take annual sales to a million units by the turn of the decade, they said. Amini-Defender will allow the company to satiate the demand of Indian buyers, who have been increasingly opting for SUVs over luxury sedans.

Big Boost Likely to Make in India Drive

It will also allow the company to play in the volumes segment globally that Chief Executive Ralf Speth sees as key to improving profitability.

For India, local production of marquee brands like Land Rover will give a big boost to the country's image as a manufacturing base for automobiles. After its 2008 acquisition by Tata Motors, JLR had studied the possibility of manufacturing its vehicles in India. But it didn't proceed further due to doubts over parts supplies.

"Unlike the past, the discussion is currently being led out of the (JLR) HQ in the UK. When compared to 2012, when the company had conducted the feasibility of introducing the new Defender, this time around they feel the vendor fraternity has matured on the quality front," said one of the three people ET spoke to.

A small team of engineers has already reached out to vendors to discuss the quality and cost of components the company would likely need, and it is seeking quotation for the potential manufacturing of 50,000 units a year, the person said.

The vehicle may be made at Tata Motors' Pune plant if the plan gets the go-ahead.

Focus on India

India is "absolutely of interest to us", CEO Speth told ET, but didn't respond specifically to a question on local manufacturing, or the mini-Defender project which is code-named L860. "I am sure India will eventually grow big like China. The country has young population, majority of them speak in English and have a very good skill level. It is just a matter of time," he said.

"Led by strong fundamentals, there should be an explosion in demand; therefore you have to be ready to participate in that transformation." The project is yet to be finalised, but "the probabilities of Land Rover making vehicles locally are high", said a person associated with the company.

Both Tata and JLR are comfortable with the cost-quality mix of vendors in their efforts to develop a premium SUV for the Indian company, and are encouraged by the increasing instances of automakers producing premium cars in India for exports, he added.

Redefining entry level

JLR, which competes with German Mercedes-Benz, Audi and BMW in the luxury-car market, has its products positioned largely at the higher end.

With the Evoque and XE, it has attempted to create a new entry level, which helped it expand sales, and the company is now seeking to build further on that. It has been regularly investing 3.5-3.75 billion pounds every year on creating new products and fresh capacity.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.