JLR drives into India, eyes defence sector biz

Written by Corporate Bureau | Mumbai | Updated: Jun 29 2009, 15:22pm hrs
Iconic British brand Land Rover could soon be at the service of the Indian defence forces. Tata Motors, which launched the Jaguar and Land Rover (JLR) in India and opened a company-owned showroom in Mumbai on Sunday, is learnt to be pitching to sell Defendera vehicle from the Land Rover range to the armed forces. Our talks with the Indian government are at a nascent stage. There are a few Defenders with the forces on a trial basis, said a senior JLR official. Other JLR models used in the defence sector globally include the armoured Discovery and the armoured Range Rover.

Tata Motors on Sunday launched Jaguar XF, XFR and XKR and Land Rover Discovery 3, Range Rover Sport and Range Rover in the country. The Jaguar range is priced between Rs 63 and 92 lakh (ex-showroom, Mumbai), while the Land Rover range is between Rs 63 and 89 lakh (ex-showroom, Mumbai). The company acknowledged that the two brands would have a very niche market. Among the two Jaguar and Land Rover- it sees the latter getting volumes, especially with Freelander (diesel), to be launched this October. Freelander will carry a starting price tag of around Rs 32 lakh.

These brands will be positioned in the premium luxury car segment, which include players like Mercedes Benz, BMW and Audi. This segment has been seeing a double-digit growth over the last few years, which ranges from 18% to 25%, says Abdul Majeed, an auto analyst with PricewaterhouseCoopers. Currently, the high-end premium segment is around 3,000-5,000 cars in India. Tata Motors, however, has not specified how many cars they intend to sell in the JLR range in India. David Smith, chief executive officer, JLR, said, We have been successful in China and Russia. India has been a gap and we want to fill it.

The company has sold around 11,000 Land Rovers and 2,000-3,000 Jaguars in China until now. There are around 500-600 Land Rovers on Indian roads, brought into the country through imports.

The company has an arrangement with Tata Capital for financing the two brands, and is also in talks with ICICI Bank and HDFC Bank regarding the same.

Ratan N Tata, chairman, Tata Motors, said, The two brands had been well received in India earlier, but later got disconnected. Now, we intend to extend the penetration of the two brands in the market and give Indian customers a chance to experience the brands. He added there would be rationalisation brought in between JLR and the company, and the two can work closely on the technology front and share intellectual property rights.

There are tremendous skills and opportunities with JLR. The two are terrific brands and we have to work at getting the R&D going to give life to new products, Tata said.

The company has already received an order for Range Rover, which it said would be delivered in mid-July. Currently, JLR products will be marketed through the dealership in Mumbai. Tata Motors is in the process of selecting franchisees for the brands, which is expected to be finalised by year-end, explained Bob Grace, director, overseas operations, Land Rover. Navnit Motors, an importer of the Land Rover, will remain as the dealer for the brands. By next year, we expect to have at least seven dealerships spanning major cities, said a senior official.

Asked what the delivery time will be for the cars, Grace, said, We will have some standing stock with us. The delivery of cars can take from a few days to a couple of weeks, depending upon the demands of the customers, if they want certain customised features.

The company is also looking at enhancing its sourcing for JLR from India. We have a team working to look into expanding our vendor base. We source from India, East Europe and China, said David Smith, chief executive officer, Jaguar Land Rover. On engines, Smith said, We have long term contracts with Ford which we signed at the time of buy out. However, we will be looking at other OEMs and suppliers.

He did not divulge more details. Referring to a statement from Ravi Kant, vice-chairman, Tata Motors, on further plant shut downs and job cuts at JLR, Smith said, We have to take some extraordinary measures. There can be some more job cuts.