Jaguar Land Rover investments in UK, China and India: What does an investment of £1.5 billion a year mean?

British carmaker Jaguar Land Rover has been climbing the graph in terms of production, vehicles launches, sales and investments after Tata Motors took to the helm. This Brit feather on the Indian carmakers cap will see investment doubling. The £1.5 billion a year financial shot in the arm equates to increased job creation, and funds will go towards vehicle portfolio expansion at home, and overseas.

While China is clearly saying no to car buying in terms of sales, which sees even the mighty Lamborghini resorting to extra marketing expenditure to hold their boat steady, the scenario for JLR looks quite sprightly. The Tata Group is set to ramp up Jaguar and Land Rover production in China, and based on raw cash fuel that’s going in, jobs and cars will increase.

Tata has zeroed in on a Chinese joint venture partner for their luxury vehicles manufacturing and an official announcement to this regard is looming overhead. With Autocar having put the spotlight on a secret ‘baby’ Jaguar project, JLR investments talks don’t look too farfetched. The to be manufactured car in question is likely to be a compact saloon car at a price range of £22,000 that would compete with Volkswagen Group’s Audi A3 hatchback. As per Indian sources, the new vehicle is about 4.5 metres in length and would be powered by JLR’s all-new three-cylinder, 1.5-litre engine, and four-cylinder, 1.8 and 2.0-litre turbocharged petrol and diesel engines. By the time of launch, you’re likely to look at at eight and nine-speed automatic gearboxes.

Last December, Chinese sources pointed at Jaguar Land Rover having ‘agreed in principle’ with China’s Chery Automobile in regards to development of a luxury car. What’s even more encouraging is the fact that while the world may be missing out on quintessential British cars keeping in the mind the fate of original Brit marquees, the Tata Group lays emphasis on the fact that UK production and investment are also set to increase.

CR Ramakrishnan, Tata’s chief financial officer went on to say. “Over the past five to six years, Jaguar Land Rover has spent around £700million to £800million annually on capital expenditure and product development. Going forward, we will double that.” “Jaguar Land Rover spending will be in the order of £1.5billion each year.” The investment plan is applicable for the current fiscal.

Tata Motors profits for Q4 of 2011 saw Jaguar Land Rover’s contribution amount to 95%. That accounts for profit margin of 20% and equates to thrice the profitability recorded by Tata Motor’s domestic business in India.

Expansion plans for the Halewood Jaguar factory are rife with an investment of up to £100million that works towards doubling plant size, and 1,500 new jobs. November 2011 had JLR announce 1000 new jobs for work on export-led expansion plans. The move is in line with the company’s plan to deliver 40 new luxury vehicle variants in a 5 year period backed by a multi-billion pound investment.

Their Land Rover plant in Halewood manufactures the compact new Range Rover Evoque. In the offing are plans for a new gen Range Rover production at the Solihull plant this year, spy images of which were seen late last year.

Jaguar Land Rover has their hands full with the Jaguar C-X75 and C-X16 two seater sports car concepts that made their Indian debut this year at the 2012 New Delhi Auto Expo. There’s also a lot of talk regarding what will happen to the iconic Defender, and a £355million engine plant in Wolverhampton that again works towards additional job creations.

Tata purchased JLR from Ford in June 2008 for £1.5 billion. Talks about the next gen Defender off-roader being built in India from 2015 can’t be sidelined, and in fact the company could export the built in India Defender off-roaders to the UK as kits that would be assembled in their British plants. Currently, Land Rover Freelander models are imported to India as kits and assembled next to at the company’s plant next to Pune.