Tata Motors aims to double investments in its Jaguar Land Rover brands

Article by Christian Andrei, on February 22, 2012

The chief financial officer of Tata Motors wants to double the investments in its Jaguar Land Rover brands to 1.5 billion pounds ($2.4 billion, 1.8 billion euros) annually to be used for the launch of new products and variants. CR Ramakrishnan said that Tata Motors has chosen its joint venture partner for the China production of Jaguar Land Rover cars.

The India-based automaker is waiting for the approval of the Chinese government to begin making luxury cars in the country. Ramakrishnan said that the company will reveal the identity this joint venture “very soon.”

In early February, Bloomberg reported that Tata Motors will partner with Chery Automobile. In the quarter that ends December, Tata Motors reported a 40.5 percent increase in profits as high sales of its JLR models offset the slow performance from its domestic arm as it was affected by the high costs and interest rates in India.

About 95 percent of the profit in the quarter that ends on December is from JLR, driven by the demand for its new compact Evoque SUV in growing markets like Russia and China.

Tata purchased luxury brand JLR from Ford for $2.3 billion (1.7 billion euros) in 2008. In the same quarter, JLR reported a 20 percent profit margin, triple the figure reported by its domestic business.

Ramakrishnan expects Tata to begin doubling JLR investments from this fiscal year, which ends on March 31. This amount will also be used to upgrade technology to comply with emission targets. He explained that Tata Motors' distribution joint venture with Fiat in India is not generating the anticipated financial results but he emphasized that there are no plans to terminate the alliance.

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