Tata To Double Spending On Jaguar Land Rover: Report


2012 Land Rover Range Rover Evoque  -  Off-Road First Drive

2012 Land Rover Range Rover Evoque - Off-Road First Drive

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Indian auto giant Tata has committed to doubling its annual investment in Jaguar Land Rover (JLR), increasing it to 1.5 billion pounds ($2.4 billion) beginning with the current fiscal year (ending next month).

Thanks to both increasing sales in emerging market and increasing margins, JLR has driven growth at Tata in recent quarters, contributing as much as 95 percent of the company’s profit.

As Automotive News Europe (subscription required) reports, JLR returned a profit margin of 20 percent through December of 2011, three times the profit that Tata realized from domestic sales of Tata-branded product.

In the fiscal third quarter, much of Tata’s revenue growth was due to strong sales of the new Range Rover Evoque, as well as increasing demand for product from Chinese and Russian consumers.

JLR has realistic expectations sustaining high margins, and expects to see sales growth in emerging market begin to taper off.

To aid with sales and profitability in China, JLR is expected to appoint a Chinese manufacturing partner in the near future. Bloomberg had previously reported that Chery Automobile was Tata’s partner of choice, but the Indian company would neither confirm nor deny the report.

Despite initial claims that JLR production would not take place in India, Tata has moved production of Freelanders for the Asian market to Pune, India. Reports say the next Land Rover Defender may be built in India as well, although it isn’t clear if this production will be used for Asian market customers only.
 
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