Tata owned JLR hints at a possible automotive unit in Middle East, signs LOI with Saudi Government

Friday 14 December 2012, 10:22 AM by

Jaguar Land Rover, a completely owned subsidiary of Tata Motors, and National Industrial Clusters Development Program (NICDP) of Saudi Arabia are in talks over feasibility of setting up an automotive production unit. The two parties have started a detailed study to determine the possibility of a new facility in Saudi Arabia.

Further, Azzam Yaser Shalabi, President of NICDP Saudi Arabia and Dr. Ralf Speth, Chief Executive Officer (CEO) of Jaguar Land Rover have officially signed a Letter Of Intent (LOI) in Riyadh on December 11, 2012. Hence, an automotive partnership between the British premium luxury sports car maker and Saudi Arabian Government is certainly in the offing.

The Saudi Arabian Government and HRH Prince Faisal Bin Turki bin Abdul Azi Al Saud have already expressed their intentions to begin, develop and support the automotive industries in the Middle Eastern Kingdom. The Prince and the government feel that Jaguar Land Rover could become a valuable and great potential partner, in order augment industrialisation plans in the country.

Expressing his opinion on the latest development, Dr. Ralf Speth was quoted as saying, “We are committed to further international partnerships to meet record demand for our highly sought after vehicles. The Kingdom of Saudi Arabia is an attractive potential development option, complementing our existing advanced facilities in Britain and recent manufacturing plans to expand in other countries including India and China.”

Reportedly, the discussions between the Saudi Arabian Government and Jaguar Land Rover are still at an initial stage. However, immense possibilities have already been identified in the production of aluminium parts and spares, which is an area where Jaguar Land Rover is considered a market leader by the global automotive industry.

Interestingly, the largest integrated aluminium complex across the globe, a product of joint venture between Alcoa of the United States and Saudi Arabian Mining Company, is planned to start production in two years time. The integrated aluminium complex is due to begin production in 2014 and is situated at the Ras Al Khair facility, thereby facilitating opportunities in the automobile sector.

Jaguar Land Rover is considered pioneers of aluminium body development in the global automotive industry and utilises lightweight metals for premium cars. The aluminium body structure can be found in the company's award winning Jaguar XJ saloon and the recently launched Range Rover, which is also the first premium luxury Sports Utility Vehicle (SUV) with an all-aluminium monocoque body frame.

Reportedly, primary discussions about the potential investment in Saudi Arabia follow the British luxury automotive marque’s recent announcement of joint venture partnership with Chery Automobile Company Limited. With the new tie-up, Jaguar Land Rover plans to assemble vehicles at a new production unit based in Shanghai, China, besides expansion of its manufacturing plant situated at Pune, India.

The expansion plans follow an incredible surge in Jaguar Land Rover sales in emerging markets, thereby contributing to a 32 per cent climb up in global vehicle sales at 324,184 units between January 1, 2012 and November 30, 2012. Further, in the ongoing calendar year (2012), vehicle sales witnessed by the company in the North Africa and Middle East regions has increased by more than 9 per cent at 11,418 units.

With the outstanding agreement regarding development plans in Saudi Arabia, Jaguar Land Rover is believed to be declaring more plans in the coming 2013 year. Further, issues concerning potential capacity, level of investment and job creation have not yet been included in discussion between the British auto maker and Saudi Arabian Government.

Further, commenting on the proposed development programme of the company on Saudi Arabian turf, Dr. Ralf Speth added, “This is an exciting project that could enable Jaguar Land Rover to establish a Joint Venture partnership in a part of the world where luxury vehicle sales are expected to rise. If we proceed, it will complement our existing expansion in the UK and elsewhere.”

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