The construction of the world’s largest aluminum smelter in the Eastern province of Saudi Arabia has prompted Jaguar Land Rover to explore the possibility of setting up assembly operations in the Kingdom.
This multi-billion dollar project, which will integrate aluminium mining, refining and smelting in one expansive complex, is a joint venture between Saudi Arabian Mining company Ma’aden and Alcoa, a global leading producer of primary alumina and also one of JLR’s suppliers. When the smelter and rolling mill begins production, scheduled for 2013, it is expected to be the cheapest and most efficient aluminum producer in the world.
Given Jaguar Land Rover’s focus on increasing aluminum content in its cars, the Tata Motors-owned, British automaker senses a big opportunity in setting up an assembly operation close to this aluminium producing facility.
In an exclusive interview with Autocar India, Tata Motors’ chairman Ratan Tata confirmed. “This smelter could make the production of aluminum in Saudi Arabia very competitive. So taking a really long-term view, if we put an assembly plant there with a large press shop, given our commitment to aluminum in our products, we could have an interesting business case which we are examining today.”
The next generation Range Rover, set to debut at the Paris Motor Show later this month, is a strong example of the growing use of aluminum in JLR’s vehicles. The SUV, which is lighter by a whopping 420 kgs than the outgoing model, will be the world’s first aluminum monocoque SUV, that utilises techniques already developed for the aluminium XK and XJ of sister brand Jaguar. Future ‘high-value’ JLR models are likely to be made the same way. The direct benefits of the increased aluminum content will be seen in fuel economy, emissions, performance and agility of the new models. JLR says the benefits in the new Range Rover will be ‘unprecedented’.
Another benefit from setting up an assembly operation in Saudi Arabia could be to tap new opportunities in the Middle East, Africa and Asia. JLR is looking aggressively at markets outside Europe and is said to be ‘working on plans to extend its global production footprint, particularly in Brazil, India and China’. During the current fiscal year, cumulative sales of Jaguar Land Rover have grown by 36 percent to 110,373 units, with markets like China playing a key contributor to the growth, and business in India posting a small but healthy growth too.
Saudi Arabia, which is part of JLR’s Middle East and North Africa (MENA) business region, contributed sales of 1289 units in 2011-12. During the current fiscal, the figure is up 14 percent. The MENA region is Land Rover’s sixth largest market, and the fifth largest for Jaguar globally.