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Tata Motors Eyes New Jaguar, Land Rover Models

Wednesday, August 11th, 2010

One of the largest automobile makers in the world and owner of the Jaguar and Land Rover brands of luxury vehicles, Tata Motors recently disclosed its plans for new models under the JLR brands coming out of its drawing boards. It also plans to export some of those to the international markets while penetrating new overseas markets in the process.

The Tata Group’s board chairman Ratan Tata reveals that under the Jaguar brand, its Jaguar Land Rover Company will be introducing an entry level station wagon and a new roadster. This revelation is made by India’s largest automobile maker in terms of sales in its annual report for its fiscal year ending March 31^st released only last Monday.

It should be remembered that Tata Motors bought the iconic British Jaguar and Land Rover marques from Ford Motors Co back in March 2008 for a reported $2.3 billion.

This happened amidst a developing global market meltdown that saw vehicle sales in US and European markets slump to record lows and almost closed down the big 4 Detroit car makers. The marque was previously owned by BMW before Ford bought it in 2000.

While the first two years of the marque under Tata’s ownership proved to be a headache, with the first quarter of its preceding fiscal year well into its second year of ownership, still showing depressed market demands for the two brands. But the last quarter of the same fiscal year extending into early 2010 showed remarkable improvements resulting in a net profit of ₤3 million ($4.7 million) for the JLR company.

The market has steadily shown signs of recovery and the increasing market demand for JLR models and the improved sales prove it, the report revealed. It further indicated its plans to concentrate its marketing initiatives on the emerging Middle East and China markets.

The company also disclosed its plans to have the entire Land Rover SUV line revamped and has already started with a new sport utility vehicle model Evoque under the Range Rover brand. There are also new Land Rover vehicles with more fuel efficient and hybrid engines on the drawing board.

As part of its plans, Tata Motors is setting its sights on expanding its international market presence and the company is considering putting up new manufacturing facilities overseas. An assembly plant in South Africa is expected to start operating soon for its commercial vehicles.

During the last fiscal year, Tata Motors report that its commercial vehicle exports rose moderately to 27,878 units up by 4.7% over the previous fiscal year, while its passenger vehicle exports experienced a 9.9% decline to just 6.231 units against the same period.

The company expects this numbers to improve starting this fiscal year. Outside of the JLR brand, the company says it is working to develop model variants of its indigenous cars Indigo Manza, Indica Vista and the Nano, considered the world’s cheapest car, for international markets.

Tags: Jaguar, Land Rover, Tata
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Tata Motors on the Roll with Jaguar Land Rover Sales

Thursday, July 15th, 2010

The largest auto maker in India, Tata Motors, reports a dramatic 50% surge in vehicle sales. Its Jaguar and Land Rover marques lead the rally with a whopping 72% jump in its UK markets alone. The happy news boosted the company’s Sensex share prices to 2.2% in early Wednesday afternoon trading. The rise contributed to the Sensex benchmark average which was up by 0.3%.

Amazing Turnaround

For a long time since Tata Motors acquired the Jaguar Land Rover division from ailing Ford Motors in 2008, at the height of the economic recession brought about by the collapse of the Lehman Brothers and Merrill Lynch, the JLR was proving to be a losing business proposition that almost made the Tata Group regret its purchase decision. But over the last 12 months, the company has been reaping a whirlwind turnaround totally beyond the company sales forecast.

Jaguar’s luxury car sales grew 34% while Land Rover SUVs leaped 93% in May compared with the same period last year. Jaguar car sales have seeing a steady month-to-month growth since the launch of its latest XJ sedan.

With the economic recession seeing some light at the end of the tunnel, but getting extended by the sovereign debt crises triggered by Greece early this year, it’s almost amazing that most of the JLR’s turnaround would be coming from Europe. Now what could be driving the sales from a continent gripped in a debt crisis at the moment?

Analysts opine that Tata Motors is benefiting from new model launches which have sustained the appetite for its luxury cars in the high end markets considered more immune to the recession. Mumbai-based brokerage firm Ambit Capital observes that “The new launches are especially helping Jaguar. And Land Rover is a strong brand by itself. Overall, there has been no negative volume traction yet despite the looming crisis in Europe.

Going Forward

Europe and the UK account for more than 50% of Tata Motors total export sales. The new model launches are expected to sustain market demands for the few more months remaining in 2010 but it is not certain what the long term market prognosis will be with the looming debt crisis. Many market analysts are still hopeful any adverse impact on the economy will not dampen or erode the luxury car markets.

While Tata Motors stock more than doubled in the last 12 months, it has lost 8.8% last month as the manufacture of the world’s cheapest car, the Nano, has been battling rising cost of raw materials and domestic competition.

Tags: Ambit Capital, Jaguar Land Rover, Sensex, Tata
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India to Assemble Land Rover Freelander

Thursday, July 15th, 2010

India’s largest automobile manufacturer Tata Motors plans to start local assembly of the Land Rover’s Freelander towards the end of 2010. Its Pimpri car manufacturing facilities near Pune is being retooled with the right machineries for assembly of the Land Rover model. Its Jaguar Land Rover subsidiary plans to launch these locally assembled Freelanders by the middle of 2011 for the local markets.

Retrofitting the Local Factory

It was earlier learned that the same factory near Pune was being used by Mercedes Benz for assembly of some of its cars but have since transferred to its Chakan factory in Pune, leaving it free for the JLR to take over for its Freelander assembly.

Industry sources have intimated that Tata Motors is expected to begin trial assembly and production in December after investing around Rs 1.5 billion to retrofit the former Mercedes Benz factory. The redesigned factory will have a capacity of 20 Freelanders per month but Tata Motors plan to assemble other cars under the Land Rover brand.

Industry experts are one is saying that the local assembly of the Freelander will have positive impact on its profitability to Tata Motors. With cheaper labour cost, it means higher profit margins as the company has no plans of reducing the price tags of the local produced SUVs.

A First of its Kind

This is the first time that Jaguar Land Rover will have a local assembly plant outside of its factories in the UK. The company remains undecided on whether to use the locally assembled Freelanders for its export markets. But industry experts have opined this is the way to go with China as another option for its car manufacturing ventures. Considering the increasing affluence of the Chinese middle class, there would be a much higher demand in China. Tata Motors is seen to realize the cost benefits with imported CBU in India reaching 110% duties and taxes while CKU is only 40%.

The Freelander currently competes with the BMW X3 as well as the Audi Q5 for the mid-market segments for SUVs. The Freelander currently has a sticker price of Rs 346,900 in Mumbai. Domestic sales data is rather sparse by Mumbai’s Jaguar Land Rover office has sold 242 Land Rover cars for the 2009-2010 period.

It was in 2008 when Tata Motors acquired the Jaguar Land Rover marque from struggling Ford Motors. For a while, the JLR division continued to hemorrhage but the last 18 months have seen it reap significant profits as the marque reaped a 72% surge in sales in its UK markets recently. There are currently four JLR distribution outlets in India with a recent Jaguar XJ outlet launched.

Tags: India, Land Rover, Land Rover Freelander, Tata
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Jaguar Land Rover Goes To China

Thursday, June 17th, 2010

It was just a matter of time. After getting a remarkable upsurge in sales of its Land Rover and Range Rover line, Tata-owned Jaguar Land Rover is finally coming to its senses with plans to manufacture its vehicles in China.

Auto industry pundits have long opined that its plans to assemble car in labor-cheap China are essential in establishing Tata’s recently acquired marque as a global player in the automotive industry.

JLR currently has six automotive engineering, manufacturing and assembly plants in the UK, notably its engineering and design centers at Whitley in Coventry and in Gaydon, its Land Rover body assembly and paint shop in Halewood, two Midland factories for Land Rover in Solihull and Jaguar in Castle Bromwich and at Browns Lane in Coventry.

Earlier, there have been specializations that with the improved revenue streams of the company, the planned pull-out and closure of its UK plants in the Midlands would be reversed. But Indian Owner, Tata Motors have been quick to pour cold water onto the speculation. The plans has been reaffirmed only last for either its Solihull or Castle Bromwich to close with a final decision sometime next year.

Tata had bought JLR from US auto giant Ford in 2008 for ₤1.7 billion and has been losing money eversince. Only in May did it see its investment into JLR experience a return to profitability after losing ₤280 million over the months preceding the turnaround.

JLR reported last week it made a profit before tax of ₤32 million in May which saw a 42.3% increase in sales of its Land Rover over the same month last year. China’s performance was particularly impressive with more than a doubling of its sales over last year at 104% increase.

JLR’s Chief Executive Carl-Peter Forster had unraveled its company’s expansion plans into China while announcing the creation of 1,000 more jobs in the UK, extolling its return to profit and agreeing to sell off Browns Lane veneer factory in Coventry and pulling out of the Browns Lane factory as well.

Prof. David Bailey of the Coventry University’s Business School opined that JLR’s planned expansion into China wont’ impact on its production in the UK for as long as there’s growth in sales and they’re expanding. He says that what is more important as that “they invest and bring in a new range of models.”

He admits that JLR simply has too many UK plants and that he would not be surprised that even if production ramps up “from 200,000 to 300,000, as they plan to do, they only need two factories in the UK.”

JLR is also planning to create 1,000 new jobs to work on the new Range Rover model to be developed at its Halewood factory in Liverpool which has 3,500 engineers while looking to close down on one of its Midlands plants. At the same, Prof Bailey opines that Carl Forster expects UK government support with the Conservative party expected to shift its tax credit to support smaller companies and with roughly ₤400 million R&D money going to the UK, JLR hopes the UK government does not cut them off.

Tags: Carl-Peter-Forster, China, Jaguar, Land Rover, Range Rover, Tata
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Land Rover Defies the Global Economic Crunch with a 42% Sales Jump

Wednesday, June 16th, 2010

India’s Tata Motors group has declared that its Land Rover total sales shot up to 42.3% in May against last year’s sales for the same month. It sold 12,181 Land Rover vehicles more than what was sold in the same period last year.

A corporate press statement released this week revealed that its global markets exhibited strong sales performances compared with those of May last year. Its current sales performance for May has been improving “consistently since launching its 2010 model year line-up.” It may have helped a lot that its new Land Rover models “are equipped with the latest, most technologically advanced and efficient features in all of Land Rover’s history.”

Its domestic market from premium utility vehicles in India contributed the largest share with sales reaching 64% growth with 3.040 units sold. Its North American markets followed with sales climbing to 2,935 units to register a 24% sales increase.

China was next registering a phenomenal 104% increase with 2,026 units sold with Italy following with a 25.9% growth for selling 1.133 units. Meanwhile in the UK, its Freelander 2 remains its best seller for the May with 60% sales improvement against the same period last year. The Range Rover line-up showed the highest rate of market growth in May with a 121% increase in vehicle registration.

In addition, sales of other Land Rover vehicles like the Discovery 4 also registered increases at 84%, the Range Rover at 58% and the Defender at 32% for May 2010.

What do all these reveal? Not that the global economic recession is over though a lot of recovery signs are being seen everywhere. But far from it. It only shows that the premium markets for luxury SUVs remain unperturbed by any kind of economic slowdown caused by the larger consumer markets retreating form any spending activity. That’s because rich people remain essentially rich to go on as if nothing bad is happening around them despite middle classes losing their jobs and spending capacities.

The Land Rover name, much more that of the Range Rover, is not exactly your typical middle class or mass market product. Mass market cars below a certain price point tend to suffer diminished sales and reflect the overall economic downturn because they are pitched to markets worst hit by the economic crisis that started in 2008. Royalties, celebrities and the landed gentries are hardly bothered by all the woes and depressing economics around them while they continue to spend on the luxuries their money can afford.

In short, premium markets are not price sensitive. Nor are they dependent on the overall state of the economy. Even in countries with severe economic meltdown, rich people simply import what they want or travel overseas to do their shopping. This is one of the many things savvy brand manufacturers have long taken advantage of by coming out with upscale product lines that cater to the rich and moneyed so they remain afloat even in time of recession.

Tags: Land Rover, Land Rover Freelander 2, Range Rover, sales, Tata
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Tata Takes Jaguar Land Rover to the Road of Recovery

Wednesday, April 7th, 2010

Amidst a worldwide economic recession, India is surging ahead with a super-fueled economy considered second only to China. Nothing is more evident of this than the sales performance of Jaguar Land Rover. It just posted $59 million in profits for the month of February.

Providing an encouraging swing to the recovery in global car sales, India’s Tata Motors reported its division selling luxury British marques Jaguar Land Rover sold 17,197 cars around the world in February. That’s a 60 per cent increase in sales for last month.

The previous 10 months in its fiscal year showed a 16% decline reflecting the dismaying economic slump in 2009, Land Rovers sales were up 62% at 13,905 in February alone, representing 55% higher at 3,292 units. A JLR spokesman confirmed that “This is the sixth consecutive month of improvement for Land Rover.”

Land Rover sales and Turkey at 162% higher. In other emerging markets, China sales doubled, while sales in Brazil increased 75%. Sales in Korea were up 87% South Africa rose to 165% from the previous quarters. In the meantime, the more mature North American and Indian domestic markets showed Land Rover sales up at 18% and 46%, respectively.

Tata Motors may have bought the Jaguar Land Rover marques but it continues to employ 8,000 people in the UK to assemble its cars in the West Midlands and at Merseyside and Halewood.

Senior management at Jaguar Land Rover recently reported the company’s first quarter profit since getting acquired from Ford Motors by Tata for £1.25 billion back in the summer of 2008. From October to December 2009, it enjoyed its first profits of £55 million, a stark contrast with the previous quarter losses of £60 million. On the other hand, its Jaguar XF sports car priced starting at £29,900 has garnered better popularity in the UK selling 992 units in the last ten months compared with 258 units in the 12 months prior.

The Jaguar Land Rover Company is currently overseen by Carl-Peter Forster, the new Tata Motors CEO who used to run General Motor’s European operations. The management team at Jaguar Land Rover also found a new head in the person of Ralf Speth.

Mr. Forster and his team have yet to decide on the fate of Jaguar Land Rover’s two West Midlands factories the UK which were earlier announced by the previous regime as slated for possible closure. Its business plans called for closing either Castle Bromwich which makes Jaguars, or its Solihull plant which makes Land Rovers.

Either way, Tata plans to offset either closure with 800 jobs to be created at Merseyside where the new LRX baby Range Rover is planned to be built. But it does leave a bad taste in the mouth that just when JLR is earning money, it would down close down historic factories that would lose thousands of jobs.

Moreover, Jaguar Land Rover’s finances got a boost last week with confirmation from the European Investment Bank that it will be at the receiving end of a £340 million research fund.

For more information, visit timesonline.co.uk

Tags: Carl-Peter-Forster, Jaguar Land Rover, Range Rover, Recession, Tata
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JLR Back On Track Says Industry Expert

Tuesday, March 16th, 2010

David Bailey, one of the leading experts on the auto industry, has stated his belief that Jaguar Land Rover’s impressive return to profit during the last three months of last year is a firm indication that the company has finally found its feet following one of the worst recessions on record. Jaguar Land Rover recorded a profit of £55 million for the final three months of 2009, and this on the back of losses totalling £60 million during the previous quarter.

According to Tata Motors, the owner of JLR, the company’s strong recovery was due at least in part to much stronger general market conditions. Tata also added that additional new models added to its overall range had also aided the company’s performance, with sales rising 68% as compared to the previous period for last year. The sales figure totalled in excess of 165,000 models, with the majority of market growth being seen in North America, Russia, Europe and China.

Mr Bailey, who is professor of international business strategy and economics at Coventry University, stated that the Tata-owned JLR had recorded operating profits following proactive and aggressive cost-cutting measures as well as a rise in sales figures. Professor Bailey added that the improved sales figures were also thanks to upswings in markets such as China and the UK, as well as “through sheer hard work by the firm.” He added that the re-vamped 2010 Land Rover range was also performing strongly, and that the “stunning Jaguar XF is taking on all-comers, and its real benefits have yet to be fully recognised.”

Sales of Jaguar Land Rover increased by almost a quarter to 23%, rising to 44,300 vehicles – a figure up from 35,000 for the previous quarter. The UK market also recorded a rise in sales by a third to 14,400 vehicles. This figure was thought to have been largely helped by the confidence generated by the car scrappage scheme. Chinese sales also rose by 2.1% to 3,400, whilst sales in North America dropped by 7.3% to 9,600 largely as a result of the continued consumer switch to smaller, more fuel-efficient vehicles.

Professor Bailey went on to comment that the switch to more fuel efficient models indicates the importance of Jaguar Land Rover’s recent £800 million investment in green technologies, referencing the potential importance to the company of the LRX – the company’s lightweight hybrid known by some as the ‘baby Land Rover‘.

JLR’s parent company, Tata, has strengthened on the back of the receipt of more than half a billion in overseas funding, including around £170 million from GE Capital. With this JLR will have the ability to draw cash immediately as its cars leave the production lines which will serve to also boost the company’s working capital as it will shorten the 30-40 day waiting gap between the production of cars and their eventual delivery to dealerships.

In conclusion, Professor Bailey stated that he would prefer to see investment in UK industries by British state-owned banks and less support granted to hostile takeovers of successful British companies such as Cadbury. Professor Bailey believes that more government investment in new technologies would enable UK car manufacturers to really compete – especially with regard to electric cars.

Read more on this story, including more of Professor Bailey’s analysis at BBC.co.uk

Tags: David Bailey, Jaguar Land Rover, Tata
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EU “Clean Car Loan” Boost for JLR

Tuesday, March 9th, 2010

Tata Motors climbed by 2.45% to Rs 789.80 on the news that its UK arm, Jaguar Land Rover, is to receive a £340 million loan courtesy of the European Investment Bank in order to aid the production of more energy and fuel-efficient vehicles.

The news coincided with the fact that the BSE Sensex climbed 70.88 points to 17,123.42.

As India’s biggest truck maker with regards to sales, Tata has an equity capital of Rs 544.19 crore. The current share price of Rs 789.80 discounts the company’s third quarter profits from last December, with annualised EPS of Rs 29.42 and by a PE Multiple of 26.84.

The EIB’s eight-year loan to JLR is a part of the assistance package made available by the European Union to European car makers still suffering the effects of one of the worst global recessions on record. The EIB is an institution that enjoys the backing of the central government of the EU. It is believed that the loan will, in part, be used to expand work on hybrid vehicles, whilst some funds are likely to be diverted into research designed to reduce the weight of vehicles with the aim of increasing the energy efficiency of vehicles.

June 2008 saw Tata Motors acquire Jaguar Land Rover from the Ford Motor Company for $2.3 billion. On top of this Tata Sons, the holding company for Tata Group firms, has along with Citigroup acquired Rs 86.5 lakh shares in total of Tata Motors from Daimler AG.

The German car maker, Daimler AG, sold its entire stock of around 2.56 crore shares, levelling out at an average price-per-share of Rs 751.67 through various bulk deals on March 9th. Daimler, which is the largest manufacturers of trucks by sales globally, formed an alliance with Tata Motors in 1954 in order to supply the technology for trucks in India. This technology alliance ceased in 1969, but the companies entered into another alliance in 1994 in order to facilitate the distribution of Daimler’s luxury cars in India. This partnership came to an end in 1997 and Daimler is currently increasing its India-based and focussed activities.

Tata Motors recorded net profits of Rs 400.14 crore for the third quarter of December 2009 as compared to losses of Rs 263.26 crore for the third quarter in December 2008. The company’s net sales saw a rapid rise of 89.4% to Rs 8929.80 crore for the third quarter in December 2009 over the previous year’s third quarter period. The impressive rebound has been attributed to a combination of factors, including a low base effect, robust sales volume and decent operating performance.

It is thought that the EU loan will further enhance performance and aid the company’s drive into the production of fuel-efficient vehicles. This is especially important in today’s market where economic car ownership and usage is paramount in many people’s minds as fuel costs increase along with environmental concerns.

For more information about Tata’s developments as well as what is happening with the recent loan be sure to visit The Associated Press regularly for breaking news and other recent updates.

Tags: European Investment Bank, Jaguar, Land Rover
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Land Rover Besting BMW’s India SUV Market

Friday, February 26th, 2010

Recent sales reports show that Tata’s Land Rover line-up is currently besting BMW in terms of SUV sales throughout India. Following Tata’s acquisition of the Land Rover title and its opening up of the whole line of vehicles in India early last year reports for January show a total of 26 units sold compared to BMW’s paltry 16 units. While this is still quite a bit shy of Germany’s Audi brand selling out 114 units it is a far cry ahead of Mercedes mere 6 units in the area.

Analysts attribute the recent sales increase and better market standing primarily to two factors: price and selection. An entry-level Land Rover vehicle, for instance, will cost consumers Rs 35 lakh while a top-end model will cost Rs 1.11 crore. BMW models, on the other hand, cannot be purchased for less than Rs 55 lakh. The amount of selection for vehicles offered by Land Rover is also much greater, offering the full line-up of models from the Discovery to the Range Rover Sport whereas BMW only offers Indian consumers the X3, 5 and 6 model SUVs.

These reports have met with a large amount of praise from UKs Tata executives, and additional plans are currently being made to expand Land Rover offerings to more cities throughout the country in order to capitalize upon the new market standing. Land Rover sales have even bypassed those of their other purchased line-up of Jaguar vehicles, the other title purchased with Tata acquired the Land Rover brand name.

Although SUVs in general are still facing an uphill battle in the global marketplace as more and more consumers are focusing on fuel-efficient cars and eco-friendly solutions many booming markets such as India and China are still showing promising signs of growth thanks to the boom of personal car ownership in the past few years. In order to fully utilise this Tata is focusing more efforts into these markets in particular in order to establish itself and its brands as a stable, reliable and consumer friendly supplier of affordable SUVs.

As far as market viability is concerned sales of luxury cars such as SUVs are expected to grow by as much as 15% this year throughout India and many manufacturers are scrambling to ensure that they are at the top of the list in consumer minds. To do this, however, many manufacturers are needing to develop factories within India to produce vehicles domestically as the majority of luxury cars currently being sold there are being imported as “completely built units”, or CBUs. This significantly adds to the cost of the vehicle due to trade tariffs and other transportation expenses that can only be circumvented with additional local production facilities that will take more time and company investment to develop. Still, Audi is looking to expanding its production into the local area in order to offer a domestically produced Q5 model in April and Tata is looking to do the same in the near future in order to solidify its market holdings and push forward as a leader in the coming months and years.

For more information on this story be sure to visit The Economic Times and keep up to date on all of the latest news.

Tags: BMW, Land Rover, Q5, Tata
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The cars for the wealthy, Jaguar Land Rover have rocketed their way into making huge profits

Friday, November 27th, 2009

After battling with the recession for a few years, it looks like Jaguar Land Rover have finally steered themselves into a profitable business. It is believed that 2 main things helped them to get back on track.

Firstly the aggressive price cutting that they did with most of the cars, helped more people to be able to afford them. Secondly was the release of the upgraded Land Rover, Range Rover Sports and Discovery 4. Jaguar sales rose by 23% to 44,300 vehicles from 35,000 in the previous part of the year, which is a huge step up, and has generated huge new profits for them. “We did not expect the turnaround to happen so fast,” said Surjit Arora, an analyst at Prabhudas Lilladher, an Indian stockbrokers. Just last month, the car dealer secured a loan for $175 million dollars from the State Bank India, after failing to receive a recovery loan from Britain. “We see signs of stabilization and improvement. Many of the cost reductions under way at Jaguar and Land Rover should benefit us in the coming quarters,” said Tata’s finance chief, C Ramakrishnan.

It looks like Jaguar Land Rover will be on an uphill streak after they have finally started to get things right. Jaguar stated that : “Retail sales in some markets, including the UK and China, showed notable improvement.” Jaguar helped Tata achieve a net profit of 217.8m rupees (£2.8m) in the quarter, compared with a net loss of 9.41bn rupees a year ago.

Don’t be surprised if you see Jaguar Land Rover making use of their new found fortune, by releasing new cars next year, alongside with a lot of publicity and advertising. Who knows, you may even get one of their cars yourself.

Tags: Jaguar, Land Rover, State Bank India, Tata
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