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NEWS
Land Rover seeks global footprint
New factory in China set but Land Rover eyes other localesLand Rover will open a 230,000 car per year factory in China in 2015, but is also considering plants in locations as diverse as Saudi Arabia and Brazil.
Speaking at last week’s launch of the new L494 series Range Rover Sport, Jaguar Land Rover (JLR) global sales boss, Phil Popham, confirmed the company was looking at a range of manufacturing options as it seeks to strategically expand its manufacturing base.
According to Popham, key to Jaguar and Land Rover’s success is a move away from all-British sourcing.
Although the key exec is at pains to point out the brand does not seek to become a “volume” player, it looks likely to being supply constrained until the Chinese (and other plants) come online.
Already Range Rover buyers face a six month waiting list. Popham says Range Rover Sport demand will see a similar order bank when it launches globally in September. The company built over 100,000 Evoques in 2012 and is in need to increase both Evoque and Freelander production to meet demand.
Looking ahead, a new Discovery, hybrid and four-cylinder variants of Range Rover and Range Rover Sport will also challenge the marque’s current manufacturing base. Talk of entrants to new segments looks set to exacerbate Land Rover’s concerns.
“Obviously, we’re going to start building [vehicles] in China in 2015 and that will relieve some of the capacity issues that we’ve got in the UK,” Popham told motoring.com.au.
“At the moment, the only plans are to build in China for China. So, building a factory that’s got a capacity of 230,000 cars -- it’s a significant factory. [But] We’ve got strategic projects for the moment looking at Saudi Arabia, looking at Brazil, and potentially looking at other places for long term manufacturing facilities,” Popham revealed.
One of India’s most successful industrial conglomerates, the family-controlled Tata Group purchased JLR in 2008. Despite this, and the existence of a CKD (complete knocked down) Jaguar assembly facility, the Sub-Continent is not a slam dunk, Popham warns.
And despite much speculation, nor is it certain that Land Rover’s Defender replacement will be built in India, he says.
“We’ve got excellent partners, fantastic facilities [in India]... We’re set up nicely for growth when it happens. [But] We’re being quite prudent in terms of when that is... At some point that premium segment is going to take off. It’s not at the moment because of the economy and the exchange rate, but, so we’re cautiously developing those.”
In the case of Defender, Popham says the family of vehicles could be built in any one of a number of locations.
“We’re looking strategically at the moment at Brazil, Saudi, India, the UK, and there’s other places we are considering as well... And we won’t build [Defender] in all of them,” Popham stated.
“At the end of the day we’re a relatively small manufacturer in global scale. When we do invest, every pound we spend has got to be a good pound. I’m not avoiding the question you’re asking; I don’t know the answer to that at the moment...
“We have to look at all those opportunities... Where in the world do we need to build to benefit from incentives; to benefit from exchange rate volatility; to benefit from reduced input duties. And then it’s, based on our economies of scale, what are the best products to build in different locations around the world?”
“We need a more strategic approach... To say: ‘Where do we need to be for the long term?’” Popham stated.
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Written byMike Sinclair
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