EXCLUSIVE: Jaguar Land Rover in talks over new production operation in Brazil

VEHICLE manufacturer Jaguar Land Rover has confirmed to sources in India that it is looking at the possibility of setting up a new manufacturing facility in Brazil.

No details of the scheme have been officially released but Phil Popham, JLR’s Director – Group Sales Operations, is quoted in the Indian media as saying the company is already holding talks with the Brazilian authorities.

Such a move would mark a further expansion of the JLR brand on a global stage. The Indian-owned company already assembles UK-made knock-down kits for the Land Rover Freelander and Jaguar XF at a plant in Pune in India, while it is currently developing a new factory in China in a joint venture agreement with domestic manufacturer, Chery.

Popham told the Business Line on The Hindu website in India that the Brazilian market remained a strong one for the company and in order to keep the sales momentum going then expansion had to take place.

He said in interview that Land Rover had been the leading premium brand in the country for some time and that the brand was backed up by a strong dealership network and a healthy SUV (sports utility vehicle) market.

“We believe that to keep that momentum going, then we may have to manufacture some products there,” he is quoted as saying. He adds: “We are in discussions with the Brazilian government about the potential to manufacture there.”

Barriers to the strategy progressing could be local economic incentives, tax structures and import duties, while further analysis of the long-term situation would be needed before the company puts pen to paper.

Nevertheless, the comments bear out recent speculation that the company is looking to ramp-up production on a global scale.

In the UK there is talk of 750,000 vehicles a year being produced and once the firm’s new £0.5m engine plant at Wolverhampton is up and running the control of engine supply will make the company a master of its own destiny.

However, even with the expansion of the existing three production facilities – at Solihull, Castle Bromwich and Halewood – then capacity will soon be reached.

The new factory in China will be capable of producing more than 100,000 vehicles – possibly 150,000 – a year when it starts production in 2015.

However, if annual volumes in excess of one million vehicles a year are to be achieved – thought to be the company’s long-term goal – then more overseas capacity is needed.

Popham is also quoted as saying that talks remain on-going with the Saudi government about a possible production facility there.

The company announced late last year that it had signed a letter of intent with the Saudi authorities about the possibility of opening a new factory there.

The world’s largest integrated aluminium complex, a joint venture between Saudi Arabian Mining Company and Alcoa of the US, is due to begin production in 2014 at the Ras Al Khair facility. The move is widely expected to create massive potential for the automotive sector.

With JLR’s new all-aluminium production strategy now in full swing – already being used on the new Range Rover and Sport and set to be the basis of the new small Jaguar saloon announced at the Frankfurt Motor Show – then this strategy also gains credence.

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