India Watch : Jaguar Land Rover asks Ford for more engines

Automotive News Europe/Bloomberg, 12th August, 2010

MUMBAI (Bloomberg)  – Jaguar Land Rover, the maker of the $80,000 Jaguar XF sedan, is working with Ford Motor Co. to increase supplies of engines after a larger-than-expected jump in sales left it facing a shortage.

Tata Motors Limited, the owner of the UK-based luxury brands, has bought ‘considerably more” engines than projected from Ford, Vice Chairman Ravi Kant said in Mumbai on Wednesday. Ford is doing everything it can to help deliver engines, said Ralf Speth, CEO of Jaguar Land Rover.

Sales of Jaguar cars and Land Rover SUVs surged 59 percent in the last quarter, helped by a revival in demand for luxury vehicles that also caused BMW AG and Daimler AG to raise their profit forecasts. Tata CEO Carl-Peter Forster intends to open factories in China and India to woo an increasing number of wealthy people in Asia’s two fastest-growing major economies.

‘It’s a very positive turnaround,” said Deepesh Rathore, Managing Director of IHS Global Insight India. ‘The return of demand to the luxury-vehicle segment has been stronger than what people had anticipated.”

Mark Truby, a spokesman for Ford, declined to comment.

‘Strong demand’

Jaguar Land Rover, which Tata bought from Ford in 2008 for $2.5 billion, sold 57,153 vehicles in the last quarter compared with 35,947 a year earlier, Tata Motors said in a statement in Mumbai on Wednesday. Demand ‘continues to be strong” and the company is talking to suppliers about meeting its requirements, JLR said in an e-mailed statement.

‘We could produce more if we have engines,” Forster said in Mumbai on Wednesday. The former European head of General Motors Co. joined Tata Motors earlier this year. The automaker also plans to develop new types of engines on its own.

Tata Motors can purchase engines for Jaguar cars and Land Rover SUVs from Ford until 2019, according to the terms of the takeover, Debasis Ray, a spokesman for the Indian truckmaker, said in an interview.

Tata Motors climbed 5.2 percent to 1,006.7 rupees in Mumbai, the highest level since at least January 1991, according to data compiled by Bloomberg. The shares have gained 27 percent this year, the best performance in the benchmark Sensex Index, which has advanced 3.5 percent.

American depositary receipts of Tata climbed in New York composite trading to a record $20.67. That’s the highest since the company began trading in the United States in September 2004, according to data compiled by Bloomberg.

Tata profit

The increased demand helped Tata Motors report a first-quarter net income of 19.9 billion rupees ($430 million) in the three months ended June, compared with a loss of 3.3 billion rupees a year earlier.

Jaguar Land Rover posted net income of 221 million pounds ($348 million) in the quarter, compared with a year-ago loss of 64 million pounds, Chief Financial Officer C. Ramakrishnan told reporters in Mumbai yesterday.

The carmaker intends to revamp Jaguar’s range by adding a station wagon, a new roadster and an entry-level model. The company aims to hire more than 1,000 more workers in the medium term, Speth said.

[Source: Automotive News Europe/Bloomberg]

Clive Goldthorp

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