Tata Motors announced yesterday that the Indian company will be doubling its investments in the Jaguar Land Rover brand to 1.5 billion pounds - $2.4 billion – a year.
“Over the past 5 to 6 years, JLR has spent around 700 million to 800 million pounds annually on capital expenditure and product development. Going forward we will double that”
-C.R. Ramakrishnan, Chief Financial Officer, Tata Motors
Jaguar Land Rover has played a leading role in Tata Motor’s recent growth; brand popularity in emerging markets and high demand for new vehicle models (Evoque!) has created an influx of revenue for the Indian automotive manufacturer. Jaguar Land Rover was responsible for 95% of company profits in the quarter ending in December, thanks in large part to profit margins of 20%. While impressive (the JLR brand saw three times the profitability as Tata’s domestic business), Tata’s financial brain trust acknowledges the difficulties in sustaining this level of profitability.
Regardless of challenge, Tata Motors is aware of JLR’s value to the company and understand that to maintain levels of demand, JLR must continue to create innovative new products and bolster their presence in emerging markets. This requires money, which is just what JLR is going to get.
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