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JLR takes localisation route to cut costs

JLR takes localisation route to cut costs

  Jaguar Land Rover, the iconic British luxury brands owned by Tata Motors, will focus on sourcing parts locally to reduce costs and boost competitiveness in India.

A senior JLR executive said this will be done alongside making more models in India and reducing dependency on imports. The firm assembles nearly half a dozen models in India, allowing it the benefits of lower duties.

"Right now we are sourcing globally but moving forward we are focused on increasing the local content in our cars in India. We can certainly do more of localisation that will help us reduce overall cost," said Rohit Suri, president, JLR India.

Luxury carmakers are no longer shying from buying local parts. For example, BMW has localisation content of 50 per cent for most models, compared with 20-30 per cent a few years ago. Among the components that the German giant sources from Indian vendors are engines, transmissions, axles, exhaust system and air-conditioning. Mercedes-Benz, leader in luxury car segment, is a step ahead with localisation content of 60 per cent, higher than some of the mass market brands.

"We have a 9 per cent market share in the premium segment. With the launch of models like XF and others, this share will certainly go higher. Earlier this year, we launched the Land Rover Discovery Sport and Jaguar XE," said Suri.

The recently-launched Jaguar XF, fully imported from the UK at present, will soon be assembled at JLR's plant in Pune. JLR already assembles the XJ and the XE sedan from this plant. Land Rover's Discovery Sport and Range Rover Evoque are also assembled in India.

While there are no immediate plans to begin local manufacturing, Suri said the company will study the idea as the market develops. The local sales office of JLR imports only parts of vehicles from the mother plant in the UK for final assembling in Pune. "We keep studying whether there is any need to manufacture locally and if there is a business case for something like that then definitely we will look at it. But at the moment there is no concrete plan of that kind," added Suri.

Mercedes-Benz, BMW and Audi together have at least 23 models which are assembled in India, ranging from Rs 35 lakh to Rs 1.5 crore. All the three companies are exploring assembly operations of more models.