Referred to as Jaguar Land Rover (JLR)?s ‘house’ in India, the assembly plant near Pune offers just a glimpse into the gamut of activities the company has planned for the sub-continent. Other than the assembly of models in the country, JLR is also looking at investing into a research and development (R&D) centre and an engine facility, if things go as planned. Though the company did not quantify the amount, JLR had said that it plans to invest about ?7.5 billion at least in the next five years, around ?1.5 billion every year, mainly on product development as it looks to catch up with global luxury car makers and position itself as a top premium brand.

?It is not just about assembly of vehicles here in India. We are talking about creating a house of JLR in India. We will be involved at various levels in the country including plans of investing into an R&D centre and sourcing from the country as well,? said Ralf Speth, chief executive officer, JLR. The company has already required around 500 people at its assembly plant.

?There is a knowledge basis in India, especially in information technology and human resources. We are looking at leveraging these with the help of Tata Motors,” he added.

Carl Peter Forster, group chief executive officer, Tata Motors, said, ?India has a lot to offer in terms of engineering capabilities, considering that today vehicle designing is more or less completely digitalised and India with its expertise in computer literacy will be a pool for JLR.?We want to be a player for a larger audience.?

Forster voiced disappointment with the new duty structure and new definition completely knocked down units (CKD) units. ?Assembly in India has a duty benefit but it has been reduced with duty going up from 10% to 30%.. We believe that the request to assemble automatic transmission is not good for industrial development in India,? Forster said at the opening of the plant.

The finance minister had redefined the meaning of (CKD) and expanded it to engines and transmission assembly. The new 30% duty instead of the earlier 10% duty on preassembled engines, gearboxes and transmissions was an issue. JLR will be assembling the Freelander using the CKD route with the engine coming from JLR’s Halewood manufacturing plant in Liverpool, UK. The company has no plans to make engine and transmission systems here. ?We will start with assembly and locally source more parts when we grow more,? he said.

JLR has been able to cut its price tag in India by assembling the car here by 10 to 12%. The new price the Freelander SE variant assemble here is R 33.89 lakhs (ex-showroom Mumbai) instead of the earlier close to R40 lakh price tag it had when it came as a CBU. JLR sold 891 cars in 2010-11.

JLR is looking at sourcing from India for both local operational requirements as well as for its global operations. JLR is also looking at exports from the Indian plant, which it said would happen after it has established itself in the Indian market. ?Once we develop the Indian market, we would look into exports,? said Speth. It is also learnt to be looking at setting up an engine facility in the country, for engines less than 2.2 litre, for its future products. The company preferred not to comment on this at the moment.

Forster said they were setting up a plant in India as it was their way of showing commitment to the market and show they were more rooted here and hence more accessible for a broader range of customers. JLR will be looking at increasing sourcing from India and Forster said they would build up local content into their vehicles gradually with initial targets of around 30%. Neither the investments nor the capacity of the plant was disclosed by the company.

Prakash Telang, MD of Tata Motors India operations said Tata Motors was a baby as far a manufacturing cars was considered and there was a gap that they needed to bridge and would benefit from JLR. ?I am seeing the results and we are moving in that direction. Our future vehicles will get better,? Telang said at the launch.

Talking about the performance of the brands, Forster said, ?We are still to realise the full potential of the brands. We want to expand our geographical footprint and expand our product line.? The company has 40 new product lines planned in the next five years. This would include new engines, new models and new chassis.

In India, JLR sold 891 units in 2010-11. It currently has four dealerships in the country, which it plans to take up to around 14. The Jagaur XF has been a hit in the market with a current waiting period of two months. Globally JLR has a line up of 40 product actions over the next year and it included new vehicles, new engine variants and new body chassis variants. In India, JLR plans to expand dealership network to 14 major outlets.