To increase its presence in China and India, Jaguar Land Rover must address their engine supply issues and reduce their dependence on Ford Motor Company.
The answer, it seems, is to manufacture engines through Tata Motors. Tata and Jaguar plan to focus on small, four-cylinder engines, to be used in high-end Tata models and smaller, entry-level Rovers, like the Evoque. The move reflects a corporate strategy to maintain the desirability of their vehicles in light of sky-rocketing fuel costs. Smaller engines (and vehicles) hold greater appeal to consumer bases in Jaguar Land Rover's fastest growing markets - India and China - and also reduce emissions and carbon footprint.
Funding for the new engine plants come from Jaguar Land Rover’s 1 billion pound research and development program. Manufacturing engines which will be featured across several models will greatly improve Tata's economies of scale, and should deliver a solid return on investment. There has also been discussion of Tata sharing platforms between auto divisions, presumably with Jaguar vehicles.
“Tata Motors aims to expand its international business with a focus on select markets, for which opportunities are significantly enhanced through our new platforms and products. Strong R&D capabilities and generating options to explore alternative fuel and hybrid technologies could create synergies with JLR’s plans for the future,” said a representative from Tata Motors.
Currently, there is no word on where the engine plants will be located, though the two locations most frequently discussed are India and the UK. India, with its low manufacturing costs and JLR assembly plant (in Pune), appears a logical choice. However, quality of parts would be a significant concern. Current Tata vehicles produced in India do not carry the same standard of luxury and excellence customary to the Jaguar Land Rover brand.
Those fearing that their big V-8 Land Rovers are being reduced to puny, four-cylinder econo-boxes made in India need not worry – at least not yet. Jaguar Land Rover will continue to purchase their larger performance engines from Ford.
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