JLR eyes West Asia through Saudi JV

After setting up a joint venture in China, the world's largest automotive market ahead of the US, Tata-owned British iconic brand Jaguar Land Rover (JLR) has now set its eyes on West Asia. The company on Tuesday said that it has signed a letter of intent with the National Industrial Clusters Development Program (NICDP) in the Kingdom of Saudi Arabia for an automotive partnership.

Agency reports said that JLR has signed a preliminary deal with Saudi Arabia to manufacture 50,000 Land Rover vehicles a year in the kingdom at an investment of 4.5 billion riyals (approximately Rs 6,516 crore), citing the country's commerce and industry ministry. The manufacturing plant is expected to begin work in 2017 in either the Jubail or Yanbu industrial cities.

When contacted, a JLR spokesperson said, "We have no further comment to make on this subject right now." The company release said that the details of the development options including level of investment, potential capacity and job creation are expected to be announced next year.

"We are committed to further international partnerships to meet record demand for our highly sought after vehicles," said Ralf Speth, chief executive officer, JLR.

"The Kingdom of Saudi Arabia is an attractive potential development option, complementing our existing advanced facilities in Britain and recent manufacturing plans to expand in other countries including India and China," Speth said.

It is the world's largest integrated aluminum complex that goes on stream from 2014 at the Ras Al Khair facility that has attracted Tatas. "Also the favourable duty structure in the region and easy access to other Middle East markets from Saudi Arabia would help JLR," said VG Ramakrishnan, Frost & Sullivan's senior director (transportation & logistics), South Asia, West Asia and North Africa. "There is a flat 5% duty on goods, whether you buy a car or a soap or sell it."

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