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.