Land Rover Adds $53,400 Entry-Level Model in Lineup Overhaul

Sep 03, 2014 4:17 am ET

(Updates with executive’s comment in third paragraph.)

Sept. 3 (Bloomberg) -- Land Rover, the British maker of upscale sport-utility vehicles, will add an entry-level model with the compact Discovery Sport that’s part of a plan to overhaul its lineup over the next five years.

The new vehicle, starting at 32,395 pounds ($53,400), will come to market in 2015 as Land Rover’s cheapest model after the Defender offroader and urban Range Rover Evoque, following the end of the Freelander’s production later this year.

The SUV “will be an important contributor to our business,” Phil Popham, marketing director of Tata Motors Ltd.’s premium Jaguar Land Rover division, said today in a phone interview. “We’re investing a lot of money on a product offensive on both Jaguar and Land Rover that’s expanding our product range.”

Jaguar Land Rover accounts for most of the profit at Mumbai-based Tata Motors, India’s biggest automaker. The Whitley, England-based unit, which also produces the Jaguar F- Type convertible sports car and XJ sedan, said today that it’s investing 3.5 billion pounds in the 12 months through March 31 to add capacity and models, part of a five-year program to bring out 50 new vehicles or variants.

Maserati Competitor

Land Rover is modernizing its model range as upscale marques expand into the SUV segment. Fiat SpA’s Maserati is planning its first crossover, as is Volkswagen AG’s British ultra-luxury brand, Bentley. The competition, and slowing demand growth for the currently “hot” Range Rover and Range Rover Sport SUVs, are set to hold back Jaguar Land Rover’s profit margins, Max Warburton, an analyst at Sanford C. Bernstein Ltd. in Singapore, wrote in a report today.

Jaguar Land Rover’s deliveries in the year through March totaled 434,311 vehicles. That compares with the 1.66 million autos sold in 2013 by the namesake brand of Munich-based Bayerische Motoren Werke AG, the world’s biggest maker of luxury cars.

The U.K. manufacturer is spending an “unprecedented” amount of money developing models to become “a significant player in the premium segment around the world,” Popham said. “We will expand our product range, we will move into more segments, we’ll replace the vehicles that we have today.”

Tata Motors shares rose as much as 2.8 percent and were trading up 1.5 percent at 524 rupees at 1:42 p.m. in Mumbai.

The Discovery Sport will be available in five- or seven- seat configurations and feature pedestrian air bags, autonomous emergency braking and a range of four-cylinder turbo gasoline or diesel engines, Land Rover said.

Jaguar is scheduled to introduce a mid-size sports sedan, the XE, on Sept. 8 and begin deliveries in 2015. That model will compete against BMW’s 3-Series and Daimler AG’s Mercedes-Benz C- Class.

The Discovery Sport and XE are “just the real start of a product offensive over the next five years to become more relevant, to become larger,” Popham said.