Tata Motors has announced the completion of a £340 million loan from the European Investment Bank (EIB) to Jaguar Land Rover to finance development of micro and full hybrid drive trains and research into more energy efficient car bodies for the premium car segment. These activities will contribute to lower CO2 emissions and the loan was granted under the European Clean Transport Facility, a major European Investment Bank financing programme approved by the Economic and Financial Affairs Council of the European Union (ECOFIN).
Tata Motors is India’s largest automobile company, with consolidated revenues of US$14 billion in 2008-09. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand and Spain. Among the former is Jaguar Land Rover, the business comprising the two iconic British brands.
The European Investment Bank was created by the Treaty of Rome in 1958 as the long-term lending bank of the European Union. The task of the Bank is to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States. Its main lending priorities include financing investments in future Member States of the EU and EU Partner countries. Simon Brooks, European Investment Bank Vice President responsible for lending operations in the United Kingdom, said, 'The EIB is pleased to be able to work closely with Tata Motors and Jaguar Land Rover to make a lasting contribution to automotive research that will enable the production of more environmentally friendly and energy efficient vehicles at a time of significant challenges for the European car industry.'
The EIB loan completes the last major element of the funding plan for Jaguar Land Rover, which has been an important part of Tata Motors’ efforts to strengthen its group balance sheet over the past year. In 2009, the company secured over £500 million of funding for Jaguar Land Rover. Moreover, despite the very difficult financial environment since June 2008 when Jaguar Land Rover was acquired, Tata Motors had, by October 2009, completely repaid the US$3 billion bridging loan for the acquisition of Jaguar Land Rover.
The Jaguar Land Rover business employs some 14,500 people, predominantly in the UK, including 3,500 engineers at product development centres in Whitley, Coventry, and Gaydon, Warwickshire. Land Rover’s Defender, Discovery 4, Range Rover Sport and Range Rover models are built at the Solihull plant in the West Midlands, while the Freelander 2 is manufactured at Halewood in Liverpool. The business is a major wealth generator for the UK as 78% of Land Rovers are exported to 169 countries and 70% of Jaguars are exported to 63 countries. Sales to customers are conducted principally through franchised dealers and importers.
