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Tata doubling investment in Jaguar Land Rover product development

Indian manufacturing giant Tata Motors will double its annual investment in Jaguar Land Rover (JLR) as the traditional British brands gain momentum around the world.


Tata chief financial officer C.R. Ramakrishnan told reporters the company’s annual investment into JLR product development would rise to around £1.5 billion ($2.2 billion), up from the £700-800 million ($1.03-1.17 billion) spent per year in that area over the past five to six years.

JLR accounted for 95 per cent of Tata’s total profit in the final quarter of 2011, seemingly justifying the Indian company’s decision to purchase the brands off Ford in 2008 for US$2.3 billion ($2.1 billion).

The profitability has been spurred by the global success of the recently launched Range Rover Evoque, as well as rising demand for both brands in China and Russia.

Earlier this week, Tata confirmed JLR had selected a joint venture partner to assemble cars in China, in a move that will allow it to sell its luxury cars in the emerging market at more competitive prices.

The partner remains unnamed at this stage, as Tata waits for the necessary regulatory approvals. Earlier this month, a Bloomberg report quoted sources that said JLR had teamed with Chery Automotive, although this is unconfirmed at this stage.

Jaguar Land Rover CEO Ralf Speth told the Wall Street Journal his company may spend up to £100 million ($148 million) developing the Chinese plant, and said it was also considering constructing a factory in Brazil.

Last year, the company opened a plant in Pune, India, where it now assembles the Land Rover Freelander 2.

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