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Why Land Rover in India Makes (Business) Sense

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Posted On: Sep 28, 2011 By: Charles Kayajian Category: Land Rover News

Amid overwhelming fiscal uncertainty in both the EU and the United States, Jaguar Land Rover has set its sights on selling 1,800 vehicles in India over the next financial year, a figure that aspires to double the previous year's sales numbers in the country.

We have closely followed Jaguar Land Rover’s moves in Asia, reporting on their climb toward the top of the luxury car market in India. Following production of a new LR2 assembly plant in Pune, Jaguar Land Rover sold 650 vehicles between April and August. These numbers have helped Jaguar Land Rover establish itself as the second best selling luxury vehicle in India (behind BMW). With India’s luxury car market growing at double the rate of the rest of the industry, Jaguar Land Rover’s ambitious sales goals should stand well within reach.

Why India?

What makes India such a strong market for Jaguar Land Rover? The Wall Street Journal recently reported some eye-opening statistics about the luxury market sector residing in India:

An increase in the number of millionaires and billionaires in India is driving luxury car sales, encouraging companies such as Jaguar Land Rover, BMW AG, Daimler AG, Porsche AG and Audi AG to introduce more models.

India's population of high-networth individuals grew 21% in 2010 to 153,000, according to the annual World Wealth Report issued by Merrill Lynch Global Wealth Management and Capgemini. The high-networth individuals were classified as those with investable assets of at least $1 million, excluding primary residence, collectibles, consumables and consumer durables.

With this surge in consumer wealth, the promise of the Indian luxury car market shines. Jaguar Land Rover is wise to invest resources in this segment, and should be well positioned for success. Tata Motors - parent company of Jaguar Land Rover - is a branch of the Tata Group, one of the largest conglomerates in India. Tata is the leading manufacturer of commercial vehicles in India, and ranks third in passenger vehicles production. The company has a rooted presence in its home country, making Indian manufacturing and sales efforts a logical – and potentially profitable – endeavor.

Before Land Rover purists become alarmed by the sales push in India (and the even larger one in China), it is important to remember that despite struggling sales, the U.S. and UK remain the company’s two largest markets.

For now.