Tata Motors Ltd.s Jaguar Land Rover opened its first overseas manufacturing unit in China in an effort to cut costs and continue its expansion.
As part of the expansion, JLR opened a new manufacturing unit in Changshu, about 100 km north from Shanghai, in a joint venture with state-owned Chery Automobile. The factorys early production capacity is set to be 130 000 cars and the first vehicle to come out of it is the Range Rover Evoque sport-utility, its most famous model in China.
“The demand that’s here in China will far outstrip capacity so we have absolutely zero plans to export any cars whatsoever,” Bob Grace, president of JLR China said at the Beijing Auto Show this year.
China is the single biggest market for the company. In the fiscal year ended March 31, JLR sold more than 100 000 vehicles, one Jaguar sedan for every four SUVs.
“It’s the biggest market on earth,” CEO Ralf Speth told reporters at the opening event of the factory. “Overall I’m quite optimistic that China will manage this growth.”
Mr. Speth said that Changshus unit is planned to manufacture three models by 2016, including a Jaguar. The company has targeted about 10% of the SUV market share in China, which is projected to double up to 1.2 million units by 2020.
Yale Zhang, director of researcher Autoforesight Shanghai said: “Land Rover has a unique positioning in the market as premium car sales are booming, as are SUV sales, a lot of customers in China want to upgrade to premium cars. At the same time, there are enough premium sedans in China, so it won’t be easy for Jaguar.”
The pace in the SUV market is highly dictated by models like Volkswagen’s Tiguan, Hondas CR-V and Toyotas RAV4. JLR is planning to compete with its Land Rover brand.
The company boosted investments at home, pouring money into factories in Liverpool and West Midlands. Last week JLR invested an additional £200 million to its unit in Halewood, Merseyside, to start production of its latest model the Land Rover Discovery Sport, which created 250 new manufacturing jobs. The car maker also plans to open a construction plant in Brazil.
Tata Motors Ltd. climbed 3.76% on Monday and closed at INR 494.65 in Mumbai. On Tuesday the stock edged up 1.37% to INR 501.45, marking one-year increase of 31.96%. The company is valued at INR 1.51 trillion. According the Financial Times, the 50 analysts offering-12 month price targets for have a median target of INR 560.50, with a high estimate of INR 700.00 and a low estimate of INR 334.00. The median estimate represents a 13.65% increase from the last close price of INR 493.20.
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