Report – Tata Motors exploring a plant for JLR in Saudi Arabia

Posted on: Feb 28, 2014 - 3:43pm IST

Tata Motors, the owners of Jaguar and Land Rover, is a step closer to setting up a manufacturing plant for JLR in Saudi Arabia. As early as December 2012, the British car company had signed a letter of intent with the National Industrial Clusters Development Program in Saudi Arabia to purchase aluminium for its vehicles.

Range Rover L at Auto Expo 2014 rear quarters
The new Range Rover is the the world’s first SUV with a lightweight all-aluminium body.

Tawfiq Al-Rabiah, the Gulf kingdom’s Commerce and Industry Minister, said at a recent business forum that Tata Motors has shown interest to set up a manufacturing plant for Jaguar and Land Rover in the eastern part of Saudi Arabia. It will be the company’s third largest plant in the world, after plants in UK and China.

Construction of the world’s largest aluminium smelting facility at an industrial port in Saudi Arabia has attracted Tata Motors to setup a plant for JLR in the country. It is expected that the smelter will produce the lowest-priced aluminium in the world and this makes a good business case for the company given that Jaguar Land Rover vehicles rely extensively on the lightweight metal for manufacturing.

2014 Jaguar XJ
Jaguar has started the local production of the XJ in India.

JLR also has an assembly plant in Pune, India, where it assembles the Land Rover Freelander 2, the Jaguar XF and the XJ long wheelbase.

[Source – Times of India]

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8 thoughts on “Report – Tata Motors exploring a plant for JLR in Saudi Arabia

  1. Bhargava says:

    That’s a very good development !!

    Most people don’t recognize the tremendous potential in Saudi Arabia. It is truly a vibrant business environment with impressive people.

    Reply
  2. Mohit Verma says:

    Good move Tata Motors

    Reply
  3. Dr. Nayak says:

    Good job Tata! When 50% of the population (women) can’t even have a driver’s license or drive; you found need to establish a manufacturing plant! Who is running Tata motors?

    Reply
    1. JKJ says:

      What makes you think JLR is setting up a plant only for the KSA market? Even if they were setting up the plant for the Middle East market it still is a sound investment. The luxury car market in the middle east is much larger than in India.

      Now consider these points.
      – Largest aluminium smelter in the world is coming up in the Eastern Province of SA. Its going to be producing aluminium at extremely low prices. JLR cars are predominantly made of aluminum. Hence having a plant near the smelter would not only reduce the cost of procuring aluminium from the open market , it would also also ensure a timely and non-stop supply of aluminium to JLR plant(no shipping here and there involved)

      – The tax regime in SA is almost non existent. At-least not in the form prevalent in the UK or India. So, even after corporate charges and payments to the SA govt JLR will have a lesser tax expenditure than if they had set up a plant in India or UK or anywhere else.

      – ^ Same tax benefits for exporting cars too. Intra-GCC(Almost all middle east countries) movement of goods is free.

      -Exporting vehicles would incur lesser costs as the fuel(diesel), used in the ships used for shipping, is dirt cheap in SA. Present cost for a liter of diesel is less than 8.5INR. Compare that with cost of fuel by exporting cars from an Indian port.

      – Unlike India there is no shortage of electricity in SA and the electricity costs are extremely low.

      – Finally, the labor costs are much lower than in UK or any western countries although slightly higher than the costs in India or China.

      All in all this could be a very good investment for JLR.

      Reply
      1. Bhargava says:

        Very well said, Mr. JKJ !!

        Your comprehensive writing is highly commendable !!

        Thank you !!

      2. Dr. Nayak says:

        Are you working for SA government? It is not about money but women’s and other peoples rights! Shame on you to praise one of the most repressive government in the world!!!

      3. JKJ says:

        @Nayak!

        Seriously? Not about money? Stop bringing religion/geo-politics/emotion to a post which is purely about automobiles/business.

        Based on your logic JLR should not invest or even sell cars in China, right? After all the Chinese regime is just as ruthless and repressive as the one in SA. Tell me how will that help JLR? If you look at the detailed sales report of JLR for 2013 you’ll see that China is the largest market for JLR vehicles. So withdrawing or “being morally correct” is just going to doom JLR financially.

        Companies like Google can indulge in corporate activism like supporting equal rights to homosexuals worldwide and opposing Chinese internet censorship because they have been making billions of $ every quarter and have a sizable cash reserve which is in the tens of billions of $. JLR unfortunately doesn’t have the same luxury to ignore markets. JLR sold 425k vehicles last year which is just a fraction of what Marques like Mercedes and BMW have sold (1.5million+ each) . So avoiding booming markets based on any criteria other than purely economical is simply utter stupidity.

        I’m sure people like you would be blasting Tata for spending billions on JLR if JLR is loosing money by staying out of politically incorrect markets.

        And no. I don’t work for SA govt. But I out of my 27 years of existence , i have spent 19yrs in SA and 8yrs in India. So i can, out of experience, say that things in SA are 10times better now than it was 20 years ago. Every country and society changes in time. Give SA its time. After all SA is just around 100years old unlike India which has been around for millenniums. And dont at all forget that we Indians used to burn women on their husband’s funeral pyre just a century ago.

      4. Bhargava says:

        I agree with Mr. JKJ completely and absolutely!! Golden points, all along!

        Every country/society has its own issues. For over a decade, India was/is crippled with many issues (I don’t even like to mention them).

        As long as someone is doing their business without violating the ‘Law of the Land’, no one has the right to comment. Tata group is now a Global conglomerate and has always stood by the value of ‘giving back’ to the communities they operate in, whether it’s India or South Africa or United Kingdom.

        As Mr. JKJ rightly said, “People would be blasting Tata for spending billions on JLR if JLR is loosing money by staying out of politically incorrect markets”.

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Shoeb
Shoeb Kalania

An Automobile Engineer by qualification and an automobile designer by passion, I am here with IndianAutosBlog to live my passion and do so by providing you with renderings and sketches of future vehicles.