Tata Motors seeks more engines from Ford Motor Company for its Jaguar and Land Rover (JLR) models to match production when it starts assembly operations in Asia for the two luxury brands. The company is in the process of setting up two assembly plants, one each in China and India.
Ford Motor, the Michigan, US-based company, has also been asked to brace up for additional volumes, which could spring up after the opening of the two units. Ford, the erstwhile owner of JLR before it was sold to Tata Motors in 2008 for $2.3 billion, is in an agreement with the Mumbai-based company to supply engines for JLR.
C Ramakrishnan, chief financial officer, Tata Motors, said, “Currently, Ford is delivering more than what it had contracted for, but our need is even higher than that. We believe Ford has ramp-up plans to tackle the additional volumes.” The executive was talking to analysts on a conference call.
Tata Motors has multiple contracts with Ford for the engine supply and they have different time lines, which extends beyond 2013. The company is in the process of giving Ford the engine volume (estimate) for 2013.
Ramakrishnan said they could look at alternate sources for getting engines. “Our agreement with Ford doesn’t prevent us from doing that. We can look at the Tata Motors range (of engines) too,” he said.
The new assembly plants in Asia will make JLR models, starting with the premium sports utility vehicles of Land Rover. The plants will assemble parts shipped from the United Kingdom.