Tata Motors invests in Jaguar and Land Rover to raise profits

Posted on Friday, 12 August 2011 , 16:08:04 byLucia

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Tata Motors invests in Jaguar and Land Rover to raise profits

In 2008, Tata Motors bought Land Rover and Jaguar, seriously considering the improvement of both brands. The sales of the sub-$5,000 Nano would secure the future of the conglomerate for a long time, but the Jaguar Land Rover turned the tables and it is going to be the unit that may have to bring in the profits. Thus, the Tata group plans to invest $2.4 billion annually in the development of 40 new products and variations of Jaguar and Land Rover models in the next five years. Due to rising interest rates in a country where, according to Bloomberg, 80 % of new car sales are determined by loans, Tata Motors reported that sales in India had dropped by 8.5 percent. In the last two months, the demand for the Nano has dropped by 48 %, while Jaguar's global sales decreased by 27 %. Juergen Maier, a manager at Raiffeisen Capital Management in Vienna reported that Tata Motors had a pretty flat quarter as far as the Jaguar sales were concerned and Indian passenger vehicles went down, adding that everyone was looking at the Evoque and also the product launches from Jaguar that would help increase sales.
The managing director of Intelligence Automotive Asia, Ashvin Chotai, agreed that the company revolved around the JLR unit and not the other way around. Land Rover is doing well as its sales grew in the past quarter by 22 %, selling 50, 747 units, while the Range Rover Evoque has received 18,000 orders and it is scheduled to go officially on sale in September, thus creating what the brand's director John Edwards calls a waiting list "well into next year" for the new buyers. Several Jaguar products are also in the pipeline of Tata, including the exotic 200 mph C-X75 hybrid supercar and the Sport Break version of the XF. Even more important is the fact that a small sedan will be launched by Jaguar in order to be a strong competitor for luxury models like BMW's 3-Series.