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JLR India Manufacturing Unlikely In Near Future


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Luxury car market is growing at a steady pace in India, prompting car makers to assembly more and more premium cars in the country. Currently no luxury car maker does local manufacturing as the market is still not big enough to justify investments in setting up a manufacturing plant. All this could change within the next few years and Mercedes-Benz is already contemplating producing MFA-platform vehicles in India, including the A-Class, B-Class, CLA and GLA. However the luxury automaker closest to home is still not ready for local production.

We are talking about Tata Motors, which owns Jaguar and Land Rover. The Indian car maker feels the market is not mature enough for local manufacturing of these premium and low volume luxury products. The hefty investments involved in setting up a manufacturing facility would make locally produced JLR vehicles costlier than imported ones. The British brands will soon start manufacturing products in China and Saudi Arabia, which is the first time production is being done outside the UK.

Why is Tata Motors not going for production in India? After all, it’s an Indian company. Firstly the volumes are too low to justify hefty investments. The company could make India an export base for JLR vehicles, as it would be cheaper to manufacture in India than the UK. However the taxation system and Government policies make it difficult for Tata Motors to set up an export plant. The company is hoping that the Indian Government makes it more favorable for automakers to invest in production facilities in the country.

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{ 5 comments… add one }

  • No One December 17, 2012, 11:04 am

    No.

    If you make vehicle in India, dont allow them to export only, rather they have to sell it in India too with cheaper costing :D :D

    Otherwise, TATA him self said about policy makers are so slow in India, larger firms are forced to look outside for business expansion

    Reply
    • Faisal Khan December 17, 2012, 8:05 pm

      No One, it won’t be feasible for them to price vehicles below production cost.

      Reply
  • Sansiddha Pani December 17, 2012, 12:22 pm

    I dont think we can just put it down to government policies, like the media is making it out to be.

    Jaguar for the time being remains a low volume luxury player. Land Rover only deals in SUVs, which worldwide are still not more popular than normal sedans. The sedan side, ie Jaguar, doesnt yet have a 3-series competitor, let alone hatchbacks like Audi/Merc/BMW are coming up with.

    So for the time being I think Jaguar will have limited facilities all over the world. As of now, China and the USA will remain the largest markets for luxury marques like JLR. So it is obvious that China would be the next best place to set up a plant.

    Another important fact is the heavy aluminium content in JLR vehicles, both present and future. About a third of the worlds aluminium is produced in China. India on the other, despite being a major miner of bauxite, from which we get aluminium, is not a major producer of aluminium.

    Thus from all points of view China is the best place to be making JLRs of the future. India though in a few years time will probably see all JLR models being assembled here, with a bit of indigenisation.

    Reply
    • Faisal Khan December 17, 2012, 8:08 pm

      S Pani, those are very valid reasons for JLR not to produce in India. However the Government policies are also a bit stringent when it comes to local production and exports. The Government is not so welcoming.

      Reply
    • Sansiddha Pani December 17, 2012, 9:40 pm

      The point I am making is that JLR would probably not have come to India even if govt policies were conducive.

      Reply

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