Jaguar Land Rover Pushes Back China Plant Production to 2015

Feb 06, 2014 1:23 am ET

Feb. 5 (Bloomberg) -- Tata Motors Ltd.’s Jaguar Land Rover unit said production at its Chinese venture with Chery Automobile Co. will begin next year, later than initially expected, because of delays getting machinery and equipment.

“2014 was in principle when we expected to begin production but it was never meant to be big production,” Ralf Speth, chief executive officer of Jaguar Land Rover, said in an interview today at the New Delhi Auto Expo. “We may do some test building in 2014 to get the workers trained and ready. 2015 is when the production for sale will begin.”

The factory is key to JLR’s earnings growth in China, its largest market, because local manufacturing allows companies to avoid the nation’s 25 percent import tariff. Profit at JLR surged 50 percent to 811 million pounds ($1.3 billion) in the fiscal first half ended Sept. 30, driving most of the Indian parent’s earnings. Sales of Jaguars and Land Rovers in China surged 30 percent in 2013.

The Chinese joint venture, which received its business license in November 2012, plans to invest 10.9 billion yuan ($1.8 billion) to build a factory in the eastern city of Changshu, a research and development center and an engine plant.

--Editors: Young-Sam Cho, Subramaniam Sharma