Mumbai, India: Indian engineering will play a role in the design of new Jaguar Land Rover engines, Tata Motors chief executive Carl-Peter Forster. Tata Motors bought Jaguar Land Rover from Ford in 2008 for $2.3 billion. As part of that transaction, Tata Motors entered into a series of contracts to buy vehicle components and technology from Ford. Forster said those contracts begin to expire around 2015. He said he intends to renew them, but would like to engineer new Jaguar Land Rover engines in-house, combining the expertise of the group's engineers in India and the UK. The move comes as Tata works to integrate its UK operations with its low-cost India base. He said Tata Motors' Indian expertise in engineering small engines could prove especially helpful. Global demand for small engines, even in the luxury segment, will likely grow as small engines become more powerful and fuel efficiency becomes more important.'
Indian Defenders: Tata Motors chief executive Carl-Peter Forster said Indian engineers will help out with the redesign of the Land Rover Defender, something of a British icon. 'We are determined to come up with a modern-day Defender,' Forster said. 'Our team here in India has a lot of expertise with off-road and 4x4 vehicles for developing markets. This is not to say the next generation Defender will be engineered in India, but we are one company and we should leverage our capabilities.'
Offshore 4x4: As India and China develop their auto industries, more production will likely move offshore due to cost pressures, despite political headwinds against offshoring, analysts say. Tata plans to assemble the Land Rover Freelander for domestic sales in India next year and source some parts locally, Forster said. That's essential to stay competitive with BMW and Mercedes, which already import kits and assemble them locally, drastically reducing import duties which results in lower consumer prices.
Made in China: Tata Motors is also looking for a joint-venture partner in China, its fastest growing Jaguar Land Rover market, to start assembling vehicles there and source some parts locally. Tata is on track to sell about 25,000 Jaguar and Land Rover vehicles in China this year, Forster said. Forster said he wants to further develop the capacity of Indian suppliers. Once that happens, he said, Jaguar Land Rover engines could be jointly engineered in India and the UK and substantially sourced out of India. 'It should be our aim to combine the strengths of what we have in Europe and what we see and can develop in India,' he said. Forster said he has no intention to offshore full production of Jaguar Land Rover. 'The mainstay manufacturing of Jaguar Land Rover we want to stay in the UK We don't want to deindustrialize the UK.'
Go Slow: Jaguar and Land Rover production held up by Ford. The new 5.0 litre V8 has proven more popular than either company expected after Ford sold the Jaguar and Land Rover brands to Indian's Tata Motors in 2008. The final price was US$2.5 Billion dollars. And, at the time, Ford agreed to provide Tata with engines for Jaguar Land Rover until 2019. It seemed like Ford was getting the better end of the deal. But, global economics are hard to predict. Even though many countries seemed to be suffering from an economic recession, in the last quarter, Jaguar Land Rover sales jumped.
However the increased demand has put both companies in a difficult spot. It seems that Tata can't get enough 5.0 litre engines from Ford. Which is bad news considering that this engine is offered in various versions in the Jaguar XFR, XKR, XJ and XK along with those in the Land Rover Discovery, Range Rover, and Range Rover Sport. To date, Tata has bought 'considerably more engines than it had planned' from Ford. However, both companies are, reportedly, working to resolve this issue.
Made in India: Land Rover is all set to develop its models in India from 2011. The company will most probably start in Pune with the assembly of the Freelander that is sold in the U.S. as the LR2. Vehicles manufactured in India would attract import duty of only 60 per cent which has been 106 per cent on fully built-up imported cars.