Jaguar Land Rover is looking to set up a manufacturing plant in Brazil. If it materialises, this plant will be the third JLR plant outside the UK. It has started work on a plant in China and is in talks with the Government for one in Saudi Arabia.
“We are in discussions with the Brazilian government about the potential to manufacture there,” Phil Popham, Director – Group Sales Operations, Jaguar Land Rover, told Business Line at the Frankfurt Motor Show recently.
It depends, according to him, on a number of things. It is about where the company sees the market growing; it is about incentives, tax structures and import duties; and, getting an understanding of the long-term benefits and opportunities, before JLR decides on putting up a plant in Brazil.
Work on JLR’s plant in China, in an equal partnership with Chery Automobiles Co Ltd, is apace and vehicles will start rolling off the assembly line in 2015. The plant is coming up at Changshu, near Shanghai, and can produce 150,000 vehicles a year, “but protecting for growth beyond that.”
The China plant will only produce for the local market.
China is now JLR’s largest market, accounting for 71,940 vehicles, or a fifth of its total sales of 357,773 units in 2012, followed by the UK and the USA. In 2005, China accounted for just one per cent of JLR’s combined sales and was its third largest market.
Plans for Saudi, Brazil
On the Saudi plant, Popham said discussions were still on with the Government to ensure that it was viable. So, would it be a toss up between Saudi Arabia and Brazil? “I don’t think it will be an either-or. We could do both. It really depends on the business case. It could be neither, it could be both of them,” Popham said.
Is Brazil a growing market for JLR? Popham said that Land Rover had been, for quite a long period of time, the leading premium brand.
“Good dealer network there, the SUV market is strong, the Land Rover brand is a strong brand. It is a totally appropriate product for the Brazilian market. We believe potentially to keep that momentum going, we may have to manufacture some products there,” Popham said.
India holds big potential
JLR, which was bought by Tata Motors in 2008, sees a huge market potential in India. It locally assembles the Jaguar XF and Land Rover Freelander 2 in Pune, from knocked down kits sent from the UK. It does not plan to assemble more vehicle models right now, but will make the right investment to exploit the market as and when the premium car segment grew and the economy picked up.
JLR’s sales at 269,653 vehicles during January-August were 16 per cent higher than during the same period in 2012. Sales were up in all its six sales regions and all vehicle lines had grown. For 2012, India’s wholesale numbers for JLR were 2,393 cars against 1,813 in the previous year.
Full interview: >'Investment in light-weight models to be our biggest payoff'
>ramakrishnan.n@thehindu.co.in
( The writer was in Frankfurt at the invitation of Jaguar Land Rover .)