UK gets Baby Jag as Indian-owned carmaker decides to invest in China

Discussion in 'China' started by Rage, May 29, 2010.

  1. Rage

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    Feb 23, 2009
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    UK gets Baby Jag as Indian-owned carmaker decides to invest in China

    May 29, 2010
    Robert Lea, Industrial Editor

    Jaguar Land Rover is to give the go-ahead to two new British-built Jaguar models — a sportscar and a new “Baby Jag” — in an attempt to allay fears that the carmaker is to shift production to China, with the potential loss of thousands of UK jobs.

    Jaguar Land Rover, part of the India-based Tata conglomerate, yesterday confirmed speculation that it is to build a plant in China in an attempt to increase sales in the world’s fastest- growing automotive market.

    At the same time, it confirmed plans to shut down one of its two assembly plants in the West Midlands, at Castle Bromwich or Solihull.

    JLR is Britain’s single biggest carproducing employer, with 16,000 staff in the Midlands and at Halewood on Merseyside. However, it insists that its plans to convert its assembly operations in the Midlands into one “super plant” are aimed at creating jobs over the longer term. That commitment, insiders have told The Times, includes the green light from Tata Motors, JLR’s parent, to build in Britain a new two-seater sportscar and a new compact executive car — the Baby Jag — in competition with the BMW 3 series and Mercedes C class.

    “It is our clear intention to grow in the UK and provide new jobs,” said Carl-Peter Forster, the German industry veteran who was appointed this year as chief executive of Tata Motors. Mr Forster said that move is unrelated to the decision already taken by Tata to close Castle Bromwich or Solihull.

    “This is not about getting rid of people,” he said. “It is about making one very efficient operation in the Midlands from two rather less efficient operations. It could be that we are more efficient with the same amount of people. I am not making any commitment about whether we will lay anybody off because I want to be able to honour any commitment I make. What we are saying is that it is our clear intention to grow this business.”

    Mr Forster said that opening a plant in China — JLR’s first significant investment in a plant outside Britain — is aimed at increasing sales in a country in which Jaguar and Land Rover is popular. “It is not about replacing production in the UK, it is about bringing on additional production,” he said. He added that by making models there JLR will avoid import duties and make its vehicles more competitively priced.

    Mr Forster said that his growth plans in the UK would be based on “the segments we do not cover”. It is understood those include pricing the “baby Jag” at what the industry calls “entry level” — cheaper than the cheapest £29,000 Jaguar XF that it produces.

    He warned that Tata could yet rein back UK expansion plans if motor manufacturers lose tax breaks in the new Government’s shake up of corporate taxes. Mr Forster said: “We will work wherever the [tax] environment is supportive. We want to do a job here but to make that happen we need the support from the Government.”

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