Almost four years after Tata Motors’ high profile acquisition of British marquee brands Jaguar Land Rover (JLR), the first signs of tangible synergy between the two firms are becoming visible. JLR chief executive Ralf Speth has said, it would look at building an engine manufacturing unit in India for lower specification engines that could also be used in some of Tata cars.
“We are currently building a engine factory in England with an investment of 355million pounds (Rs 2,840 crore) for low emission but high performance engines. Our next step would be to set up another facility in India for entry level engines,” said Speth. “We would see at how we can synergise our operations with Tata Motors and possibly look at making engines that would be suitable for their cars as well.”
At present, JLR relies solely on its erstwhile owners Ford Motor for all its engine requirements. Speth said building engine factories was in line with its future ambitions but the relationship with Ford would continue.
“We are a very profitable company and are investing more in R&D now. We also want to be in the running in the big league of luxury car market worldwide and investment into building new factories is a logical step,” he said.
The firm’s sales grew by 18% in 2011 to 274,280 units. But it is still small when compared to others in the market. Its German rivals BMW, Mercedes Benz and Audi sold 1.7 million, 1.4 million and 1.3 million units respectively in 2011. It is also hampered by being a late entrant into key markets like China, India and Brazil but Speth said he is in no hurry.
“We are setting up a plant in India, we are talking about one in China, another one in Brazil, but we are a small company,” he added. “I don’t have the skills and resources in-house to orchestrate everything in one step, and we have to move ahead carefully. The big car makers can do it, as they have the pockets to do it, but we have to do it a little more carefully. ”
(The writer’s trip to Geneva Motor Show 2012 was sponsored by Tata Motors)