The Indian automobile major Tata Motors which owns the British marquee Jaguar Land Rover (JLR) will reportedly double investments in its JLR brands to pound 1.5 billion a year despite the company maintaining that it will be a challenge to sustain high margins at its key profit generator.
It was reported that with soaring revenues and expanding margins, JLR has driven the company's growth in recent quarters, as strong demand in emerging countries for the famous British brands offset sluggish performance in Tata's home market. Tata Motors CFO C R Ramakrishnan was quoted as saying "Over the past five to six years, JLR has spent around pound 700-800 mn on annually on capital expenditure and product development. Going forward, we will double that. JLR spending will be in the order of pound 1.5 billion each year."
According to reports, Tata has also selected a joint venture partner for manufacturing JLR cars in China and is awaiting approval from government regulators in the world's fastest-growing auto market. An announcement on the company's China joint venture will be made "very soon," he added, without giving details. JLR had agreed in principle to develop a luxury car with China's Chery Automobile in order to win approval for a manufacturing venture, a Chinese newspaper reported in December. The reports also mentioned that Tata's JV with Fiat SpA, through which the Italian automaker utilises the company's distribution network in India, is not producing the expected financial results or sales, Ramakrishnan said. Fiat and Tata have held meetings to discuss new measures to improve its sales in the country, Ramakrishnan added, but there were no plans to end the tie-up, it was mentioned.
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