AROnline news

George Gao, Gasgoo.com, 29th June, 2009

Jaguar Land Rover, the luxury vehicle division of Tata Motors, expects China and other emerging economies to account for a third of the unit’s sales as demand in the U.S. and Europe plunges amid recession, Bloomberg reported today.

China, Brazil, Russia, India and other developing nations are now about 20 percent of sales for Jaguar cars and Land Rover sport-utility vehicles, David Smith, Chief Executive Officer of the U.K.-based automaker, said yesterday. “Emerging markets are very important for the future of the automotive industry,” he said.

“The number of rich people in India and China is rising very fast,” said Puneet Gupta, a New Delhi-based analyst at CSM Worldwide Inc., an industry consultant. “That category is looking for vehicles that represent their status. Companies would definitely like to tap this segment.”

China last year had 364,000 millionaires, compared with 3 million in the U.S. By 2013, China’s high-net-worth individuals will surpass those in North America, according Merrill’s Global Wealth Management division.

China last year had 364,000 millionaires, compared with 3 million in the U.S. By 2013, China’s high-net-worth individuals will surpass those in North America, according Merrill’s Global Wealth Management division.

Tata Motors purchased the luxury unit from Ford Motor Co. for $2.4 billion last year. In the 10 months ended March 31, sales of Land Rovers fell 39 percent to about 120,000 from a year ago, Tata Motors said June 26. Jaguar sales fell 3 percent to 47,000 in the same period.

Jaguar Land Rover has raised its 2009 China sales forecast as rising economic confidence revives demand for SUVs, Christopher Brown, the unit’s China Managing Director, said earlier this month. Last year, Jaguar Land Rover boosted China sales 63% to 12,456 vehicles.

 [Source: Gasgoo.com]

China Watch Add new tag, CSM Worldwide Inc., David Smith, Jaguar, JLR, Tata Motors

Erik van Ingen Schenau

New Maestro vans await completion

The MG TF/ZR/ZT and Rover 75 are not the first former BMC>MG models to be manufactured in China. The original production lines for the Morris Marina and the Austin Maestro were also sold to the Chinese and, ironically, both ended up in different factories located in the city of Chengdu.

I reckoned that was reason enough to visit Chengdu and discover what had happened to those production lines. The Marina’s tale is a short one: I didn’t find a single Marina, Marina van or pick-up in the streets of Chengdu. The old FAW factory has long since been closed and demolished. The social unrest at this backward factory had led in to an unprecedented demonstration on the Chengdu streets in 2003 and that gave the regime good reason to close the factory and fire the workers. No, there is nothing left of the Chinese Marinas.

The Maestro-line was first sold to a tobacco company in Shandong province, named Etsong (or Yizheng in Chinese). That company managed to produce a small series of Maestros and Maestro vans but, in 2003, the line was sold again to the Chengdu-based Sichuan Auto Industry Group Company Limited, which produces vehicles under the Yema brand. Sichuan Auto is a very small company with a long history of building strong SUVs in extremely small quantities – they are, though, particularly suitable for the rough roads of South West China.

A visit to a small manufacturer like Sichuan Auto is not easy. Nobody speaks English but, more importantly, people don’t understand why there is foreign interest in their factory and products. When one tries to make an appointment, there is always the promise to call you back, but they never call you and emails are not answered. There is only one solution: just go there.

The result: a plant with a production capacity of 10,000 cars per annum which produces just 100 cars a year. Yes, the Maestro still survives, but probably not for long…

Sichuan Auto lies 30 km from the Chengdu city centre, in a large industrial area, and not far away from a new Volkswagen complex. The factory has two divisions: left a bus factory, right the automobile factory. The receptionists were very friendly and, after two hours of phone calls and taking me from one office to the other, they decided that I was welcome and that the Sales Department should have the job of showing me around.

My first impression was that the factory was clearly very clean. However, when I had looked into the production halls, there was something strange: where were the workers? I counted 10 to 15 men throughout the whole factory – the friendly girl who showed me around claimed that there was a workforce of 750. Just two men are welding in the massive Welding Hall and three are working in the Paint Hall…

Two cars seem to be in production: the SQJ 6450N, a 4-seat van which is, in fact, an updated Maestro van (which also exists as two-seat van, the SQJ 6450) and the SQJ 6451, a small 4×2 SUV-like car based on the Maestro platform. The body of this car resembles the previous generation Subaru Forester.

I was allowed to take the SQJ 6451 for a short test drive around the factory facilities. The engine sounded strange: a very high-tone noise. It is the CQ4C15 engine, which is based on the old 1498 cc Toyota 5A and made at a sister factory in Mianyang near the epicentre of the devastating earthquake of May 2008.

OK, they let me walk around and take pictures. Only one strange restriction: I was not allowed to take pictures of… cars. A strange request: how to do you take photographs in a car factory without photographing the cars?

I spotted two heavier SQJ 6485s in one of the halls. This model is a much bigger (Toyota Land Cruiser size) 4×4 SUV. It is not clear whether these cars are already in production or that it is the intention to produce them in the near future.

Another product is the M72. This was a 2000 concept from Matra of France. Sichuan Auto is copying this concept. I counted five test models in different stages of assembly. They were completely hand-made and I was told that they were used to test different alternative-fuel engines, like CNG (natural gas, very popular in Chengdu), electrical engines and hybrids. I distinguished two different models. Here, though, I really had no chance to take photographs.

The quality of the cars was poor – they were very cheaply and roughly built and no match for the competition. I was disappointed to find a clean and nice factory with a lot of potential which was seemingly being underutilised because of a lack of expertise and effective management.

The result: a plant with a production capacity of 10,000 cars per annum which produces just 100 cars a year. Yes, the Maestro still survives, but probably not for long…

[Editor's Note: Erik van Ingen Schenau is one of Europe's leading experts on the Chinese Automotive Industry and runs the Chinese Motor Vehicle Documentation Centre website.]

China Watch

Tom Scotney, Birmingham Post, 29th June, 2009

A  deal on crucial research and development money for Jaguar Land Rover needs to be done by the end of the summer – or the firm could suffer the same fate as MG Rover.

The claim from an industry expert came as bosses at JLR owner Tata Motors said job cuts were a possibility and ramped up their war of words with the government after the Midland firm announced it had made a loss of £281 million in just ten months. JLR is still negotiating to try to get the Government to approve a £350m European loan for new development at the firm.

Professor David Bailey, of Coventry Business School, said: “JLR will get through this, but the question is in what state. If it falls behind in research and development it damages the firm, and ultimately that’s what killed off MG Rover.

“It will get through the recession, but it’s no good if it’s too small. Longer term it really depends on how well the products sell and what new products there are. The lack of research and development at MG Rover was a huge issue. It’s got to be sorted out pretty quickly too, a deal has got to be put in place by the end of the summer.”

JLR will get through the recession, but it’s no good if it’s too small. Longer term it really depends on how well the products sell and what new products there are. The lack of research and development at MG Rover was a huge issue. It’s got to be sorted out pretty quickly too, a deal has got to be put in place by the end of the summer.” Professor David Bailey, Coventry Business School

The investigation into the collapse of MG Rover has finally been completed and handed on to the Government, it was revealed this weekend. The report by independent inspectors into the £1.4 billion collapse at Longbridge in April 2005, with the loss of 6,500 jobs, took four years to complete. It is not yet known when its findings will be made public.

JLR has been hit badly by the drop in consumer confidence caused by the recession, but industry experts, and the company itself say it has a viable and profitable future if it is kept afloat during the economic downturn – which includes keeping R&D going.

Tata, which bought Jaguar Land Rover last year, has been looking to the UK Government to support the industry, as has been the case in many European countries. But the Government has not yet released any money to carmakers, despite Lord Mandelson setting up the £2.3bn Automotive Assistance Programme in March.

It is also blocking the release of a £340 million loan agreed for R&D at JLR by the European Investment Bank. The EIB loan needs to be backed by the government, but Tata and the government have not yet managed to agree on the details of the guarantee. Tata said it would be taking “a number of urgent and long-term measures” to stem profit losses at its subsidiaries.

We cannot afford to see any more jobs being lost because they will not come back. I feel that the long-term future of JLR is best served by maintaining the people who, before the recession, have created the wealth for the company and will continue to create wealth after the recession is over.” Dave Osborne, Head of Automotive, Unite

This weekend, Tata Motors Vice-Chairman Ravi Kant said more job losses and plant closures were a possibility if things carried on as they were. He said: “There have already been 2,000 job losses. We may be looking at more job losses, more plant shutdowns.”

However, Dave Osborne, the Head of Automotive at the Unite union, said Tata’s willingness to consider job cuts was a worrying sign, and a plan that could end up permanently damaging the company.

Mr Osborne added: “We cannot afford to see any more jobs being lost because they will not come back. I feel that the long-term future of JLR is best served by maintaining the people who, before the recession, have created the wealth for the company and will continue to create wealth after the recession is over. A smaller company after the recession is over is not what we think Tata wants.”

Mr Osborne said he would be seeking urgent clarification from Mr Kant over the future of JLR jobs and plants.

[Source: Birmingham Post]

Jaguar Land Rover Automotive Assistance Programme, Coventry Business School, Jaguar Land Rover, JLR, Lord Mandelson, Professor David Bailey, Tata Motors

Automotive News Europe/Reuters, 29th June, 2009

MUMBAI (Reuters) — Tata Motors on Sunday launched its Jaguar and Land Rover brands in India. Chairman Ratan Tata said it was a momentous occasion for the company. “This is in keeping with our desire to extend the penetration of the brands in India,” he said.

Tata Motors bought British-based Jaguar and Land Rover from Ford Motors for $2.3 billion last year but the company’s purchase of the brands has not been good news for the Indian automaker so far.

On Friday, Tata Motors posted its first loss in eight years at $520 million for the year to March 2009, with Jaguar Land Rover unit reporting a loss of 306 million pounds ($504 million) in the 10 months of the fiscal year to March 2009.

Jaguar is launching the XF and XK range of luxury coupes and convertibles in India starting at a price tag of 6.3 million rupees ($130,977) and going up to 9 million rupees.

Land Rover will initially be launching three vehicles including the Range Rover Sport and Land Rover Discovery 3, with prices also starting at 6.3 million rupees but going beyond 9 million.

“The luxury car market in India is very small, but there is a huge opportunity there. It is growing fast and we expect it to grow fast over the next 5 to 10 years,” said David Smith, CEO of Jaguar Land Rover.

“India is an important part of our plans for the future,” said Mike O’Driscoll, Managing Director of Jaguar.

The luxury car segment in India is less than 1 percent of the total car market there.

On the issue of loan guarantees for Jaguar Land Rover, Tata said the company is in discussions with the U.K. Government and “hopefully we will find a solution for it and our funding plan for JLR will progress.”

The company is seeking guarantees for the £340m loan sanctioned by the European Investment Bank and other loans from U.K.-based commercial banks. It is seeking these funds to develop new and more fuel-efficient cars to help improve its competitive position.

“Sustaining the downturn is important for us … and finding a solution (for the loan guarantees) is extremely important to us,” Tata said.

[Source: Automotive News Europe/Reuters]

India Watch David Smith, Jaguar, Jaguar Land Rover, JLR, Mike O'Driscoll, Ratan Tata, Tata Motors

Aston Martin Cygnet - a Toyota iQ-based commuter concept car

Aston Martin has developed a new luxury commuter concept which has been christened the Cygnet and will afford ‘customers a distinctive, intelligent and exclusive solution for urban travel in style and luxury.’ The concept will offer Aston Martin’s trademark design in a commuter car package based on the critically acclaimed Toyota iQ with a Euro NCAP 5-star safety package.

The company claims that the Cygnet concept ‘represents a creative, environmentally conscious solution, being small, yet with presence – and highly fuel efficient, now combined with the prestige of Aston Martin’s luxury brand ownership.’

Aston Martin’s collaboration with Toyota on this concept reportedly came about as the result of a chance meeting between the company’s Chief Executive, Dr. Ulrich Bez, and Toyota Motor Corporation’s new President, Akio Toyoda, when both were competing in last month’s Nurburgring 24hr race and their respective works teams were sharing a pit garage.

Dr. Ulrich Bez said: ‘Now is the right time for Aston Martin to take this first bold step to embark on this special project – made possible with the support of an organisation of Toyota’s stature and capability and the intelligent design and perfect city car package of the iQ.

‘Much work is still required, but I am confident that this project could become reality in the not too distant future. This concept – akin to an exclusive tender to a luxury yacht – will allow us to apply Aston Martin design language, craftsmanship and brand values to a completely new segment of the market.

‘The offering of a Cygnet with a DBS, DB9 or Vantage is a unique combination of opposites and a novel transport solution allowing intelligent and sensitive mobility on an exclusive and innovative level.’

Tadashi Arashima, CEO and President of Toyota Motor Europe added: ‘It’s a great compliment that the Toyota iQ has been hand-picked by one of the world’s most prestigious sports car brands, a company with whom we also share a strong friendship. This collaboration represents a natural pairing of strategies: a small yet spacious package, perfect for the city driver, finished off with Aston Martin’s iconic design language. The Cygnet is a good choice for the Aston Martin owner looking for that second or third car, which is luxurious and eco-conscious.’

Aston Martin Aston Martin Cygnet, Dr.Ulrich Bez, Tadashi Arashima, Toyota iQ

Paul Luti's Dreadnought Garage MG TF LE500 will be competing at MGLive!

MGLive!, the biggest event in the MG calendar, takes place at the Silverstone Circuit from the 10th to 12th July, 2009 and four members of XPart’s MG and Rover specialist network will be flying the XPart banner at the event with race entries and a strong trade presence.

Dreadnought Garage, Brown & Gammons, Luffield Cars and Rimmer Bros will all be represented at the event, together with Team Lunar Racing, an all-student race team supported by XPart. The three-day MG celebration, now in its fifty-ninth year, is packed with new features and is expected to attract over 10,000 visitors to the famous Northamptonshire venue.

‘We are delighted to see members of our network helping to keep MG’s heritage alive by taking part in MGLive!,’ commented Don Lindsay, XPart’s Service Marketing Manager. ‘This year’s event looks set to be the most popular yet with impressive vehicle displays and a full racing programme. Dreadnought Garage, Brown & Gammons and Team Lunar have all prepared cars for racing in the MG Trophy and endurance races and all our participating members will be on hand to offer technical hints and advice.’

Dreadnought Garage will be racing an MG TF LE500 driven by race driver Paul Luti in the MG Trophy Championship race and is also entering its MG ZT 520 in the all-comers endurance race. Team Lunar Racing, the only all-student race team to prepare a car for a professional race series, will be competing in the MG Trophy, Peter Best Insurance and endurance races and will be available to discuss its activities. The team, lead by teacher Paul Kneeshaw, is currently racing an MG ZS in the Britcar Series.

Brown & Gammons will be present at the Traders’ Village with cars, parts and accessories. Managing Director Malcolm Gammons will be racing an MG ZR in the endurance races and will also be supporting two MG ZRs built and prepared by the company in the MG Trophy Championship race. Luffield Cars and Rimmer Bros will also be present at the Traders’ Village with discounted parts and accessories. Luffield will be displaying the new MG TF LE 500.

Visitors to MGLive! (formerly known as the Silverstone International event) can expect to see over 5,000 MGs on display spanning all eras of production. The MG Car Club-run event, which celebrates MG’s 85th Anniversary, will also feature a Live Action Arena, a ‘Tour de Silverstone’ run, circuit tours and rides around the Silverstone rally circuit in an MG ZR. The Austin Healey Club will also be joining in the festivities as they mark the 50th Anniversary of the Austin Healey 3000.

AROnline readers can find out more about MGLive! by visiting www.mglive.com.

XPart Brown & Gammons, Dreadnought Garage, Luffield Cars, MG Car Club, MGLive!, Rimmer Bros, Silverstone Circuit

Jonathan Walker, Political Editor, Birmingham Post, 26th June, 2009

MG Rover enquiry complete... what will come of it?

The inquiry into the collapse of MG Rover has completed its work – but we may still have to wait to discover what it says.

My colleagues on the business desk are working on a story reporting that the inquiry into the collapse of MG Rover has been completed, at a cost of almost £16 million, four years after it began.

The collapse of the Birmingham carmaker in 2005 directly cost around 5200 jobs according to the National Audit Office, which measured the number of former MG Rover staff who signed on for Jobseekers Allowance. Their 2006 report (a 1.38mb PDF download) is here.

The Government has revealed that a new report setting out the findings of an official inquiry into MG Rover is now in the hands of Lord Mandelson, the Business Secretary, in a Parliamentary written answer to Richard Burden (Lab), the Northfield MP who has been increasingly vocal in demanding its publication.

Business Minister Ian Lucas said in the written answer: “The inspectors delivered their report on 11 June 2009. It will be for my noble Friend the Secretary of State to consider its findings and next steps.”

The steps Lord Mandelson will take obviously depend on what the report says.

The Government has revealed that a new report setting out the findings of an official inquiry into MG Rover is now in the hands of Lord Mandelson

I say there could be a delay before it is published because the report’s findings will determine whether any further action is needed. If it is needed, then the publication of the report could be considered prejudicial to that action.

[Source: Birmingham Post.net]

MG Rover Gervase MacGregor, Guy Newey QC, Lord Mandelson, Richard Burden MP

 Jim Pickard, Political Correspondent, Financial Times, 27th June, 2009

The long-awaited inquiry into the collapse of MG Rover has finally been completed* after four years and nearly £16m of taxpayers’ money.

The Business Department confirmed Friday night that it had received the findings of the investigation into the demise of the carmaker and said the report was in the hands of Lord Mandelson, Business Secretary.

However, a spokeswoman refused to comment on the details of the report, which has been superseded by immediate concerns about the fate of other car plants in the UK. The process has cost £15.9m, she admitted.

Ian Lucas, Business Minister, said in an answer to a private question by Richard Burden, a local MP, that the Government would carefully consider any similar exercises in the future to “minimise” the costs.

I have found it incredibly frustrating that we have had to wait so long for this report. The escalating cost of the inquiry has been a matter of real concern to so many people, including me.” Richard Burden MP

“I have found it incredibly frustrating that we have had to wait so long for this report,” said Mr Burden. “The escalating cost of the inquiry has been a matter of real concern to so many people, including me.”

MG Rover, Britain’s last independent volume carmaker, went into administration in April 2005 with the loss of about 6,000 jobs.

Ministers then offered a “speedy” investigation, including a review of the role of the directors who had bought the company for £10 from BMW in 2000 – the so-called “Phoenix Four”. A report was expected within 18 months.

The lengthy investigation was led by Gervase MacGregor, a senior partner at BDO Stoy Hayward, an accountancy firm, and Guy Newey QC, an insolvency law specialist.

[Source: Financial Times]

[*Editor's Note: The Financial Times' report actually uses the word "published" here and in the headline. However, the use of that word may, in fact, be premature. See the News Blog by Jonathan Walker, the Political Editor of the Birmingham Post dated 26th June, 2009.] 

MG Rover Gervase MacGregor, Guy Newey QC, Lord Mandelson, Richard Burden MP

Automotive News Europe/Reuters, 26th June, 2009

MUMBAI (Reuters) – India’s Tata Motors may consider more job cuts and plant shutdowns for the Jaguar and Land Rover unit, a top official said on Friday.

“There has already been 2,000 job losses. We may be looking at more job losses, more plant shutdowns,” Vice Chairman Ravi Kant told a news conference, adding it would depend on how the market situation evolved.

Earlier, Tata Motors reported a consolidated net loss for the year ended March 2009 of 25.05 billion rupees ($520 million) versus net profit of 21.68 billion rupees a year ago.

The Jaguar and Land Rover unit made a loss before tax of 281 million pounds ($463 million) in the 10 months of the 2008/09 fiscal year that they were on the books of India’s Tata Motors, Chief Financial Officer C. Ramakrishnan told a media conference on Friday.

[Source: Automotive News Europe/Reuters]

India Watch Jaguar Land Rover, JLR, Ravi Kant, Tata Motors

Automotive News Europe/Reuters, 26th June, 2009

MUMBAI (Reuters) — Slumping demand and poor results from Jaguar and Land Rover swung Tata Motors Ltd., India’s top vehicle maker, to its first annual loss in eight years. The company, which bought the British premium brands from Ford Motor Co. in 2008, said it was readying for a major belt-tightening as it looked to cut costs.

Tata Motors reported that the Jaguar Land Rover unit posted a net loss of £281m ($463m) in the 10 months of the fiscal year to March 2009 that the automaker was on its books, as a brutal global recession scuttled sales of cars, primarily luxury models and SUVs.

The economic crisis has sent two of the Detroit 3 into bankruptcy protection and is set to plunge Toyota Motor Corp. deeper into loss. The new president of Toyota on Thursday warned that the auto industry faces two more tough years. In India, higher borrowing costs and an economic slowdown put the brakes on auto sales for much of 2008-2009, though sales have improved since February.

Tata Motors reported a consolidated net loss for the year to March 2009 of 25.05 billion rupees ($520 million) versus net profit of 21.68 billion rupees a year ago. Net sales rose to 703.70 billion rupees versus 354.09 billion rupees.

Tata Motors reported a consolidated net loss for the year to March 2009 of 25.05 billion rupees ($520 million) versus net profit of 21.68 billion rupees a year ago. Net sales rose to 703.70 billion rupees versus 354.09 billion rupees.

The numbers are not comparable as year-ago numbers did not include results from Jaguar and Land Rover, or other assets that Tata Motors bought and sold in the year. Last month, the company reported net profit from Indian operations fell 50.7 percent to 10.01 billion rupees for 2008/09.

Since completing the Jaguar Land Rover deal, Tata Motors has struggled for financing as the global credit crisis and economic downturn cut the availability of funds. A rights share offer last year did not attract great interest, it deferred an overseas share issue and had to refinance a $3 billion bridge loan it had taken to buy the two brands from Ford.

The firm, which has a lineup of the world’s cheapest car, the Nano, to some of most luxurious, said it had agreed to extend the final maturity of $1 billion by 18 months to the end of 2010.

[Source: Automotive News Europe/Reuters]

India Watch Jaguar Land Rover, JLR, Tata Motors