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Jaguar Land Rover: Too expensive to build cars in India

Mon, 17 Dec 2012

Tata boss Ratan Tata has said that building Jaguar Land Rover in India is impossible at the moment because of silly taxes.

With the rise and rise of Jaguar Land Rover, you’d imagine that full scale production of both Jaguar and Land Rover models would be a given in India. But it seems not.

Despite bolting together CKD Freelanders in Pune, Ratan Tata has said there is no possibility of JLR manufaturing cars in India any time soon due to the ‘silly’ taxes India imposes, making even the Freelander assembled in India more costly than imports.

It seems a silly situation for Tata to find it more economic to roll out full scale production in China for JLR rather than in their home country, but China are incentivising car makers to set up shop and will benefit not just from the investment, but in new jobs and the revenue from exports. The same applies in Saudi Arabia, where Jaguar Land Rover are planning a further manufacturing plant.

There’s no doubt Ratan Tata’s statements are aimed squarely at the Indian government in an effort to win hearts and minds to change India’s tax regime in Tata’s favour, with the latest import tariffs for CKDs set at 30 per cent meaning the costs of bolting the cars together in India is in line with the 100 per cent tariff for importing fully built cars.

But the CKDs and imports are a still bridgehead for full manufacturing once JLR has built a significant enough sales base to warrant full scale manufacturing (at present, only around 1,000 Jaguars are sold a year in India). But help from the Indian government in the form of tax breaks for manufacturing and export would hasten JLR’s arrival in India as a full-scale manufacturer.

Which must make sense for Tata, JLR and India.

Source: Times of India

By Cars UK