JAGUAR Land Rover (JLR), the wholly-owned subsidiary of Tata Motors, will continue to source more powerful 6 and 8 cylinder engines from Ford Motor Company even after its engine plant in the UK goes operational in next couple of years.
Recently, JLR announced its plans to set up a new facility to manufacture new advanced technology, low-emission engines at an investment of £355 million in the UK. “The new plant will manufacture four cylinder engines. It is also being set up to partially offset supply side constraints from Ford for engines after sales of JLR recovered in last one and half year,“ a senior Tata Motors official told Financial Chronicle.
Ralf Speth, chief executive officer of Jaguar Land Rover, had said in a statement, “The all-new family of 4 cylinder engines will increase JLR's capability to offer high performance engines with class-leading levels of refinement, whilst ensuring continued significant reductions in vehicle emissions.“
“The announcement was for new engine plant for the four cylinder market. Currently, we have number of engines on four cylinder configurations and our relationship with Ford will continue for the supply of four cylinder engines till we start producing our new engine range at our plant in the UK,“ JLR spokesperson told FC.
He further said the agreement with Ford would terminate only for four cylinders engines. “But we also have six cylinder and eight cylinder engines that are sourced from Ford. So the agreement with Ford on those might continue. However, it is too early to comment till the engine plant becomes operational in couple of years,“ the spokesperson added.
Partially, there are supply side constraints, but the plant is part of the long-term strategy of JLR of producing engines and building our own capability of designing and producing engines, said JLR spokesperson.
Tata Motors senior management had said that supply side constraints are weighing down on sales of JLR in the global markets.
Jaguar and Land Rover vehicles have a four-six week waiting period in all major markets.
C Ramakrishnan, chief financial officer of Tata Motors, had said, “The engine supply for JLR from Ford was constrained since Tata Motors required more engines than it originally asked for. Ford is delivering more engines than what was contracted or indicated, but our demand seems to be even higher than that.” However, JLR has no plans to acquire the existing technology from Ford. “No, we will not buy the technology from Ford. We will be developing our own technology. It will be part of our product development strategy — designing, developing and manufacturing of engines in-house,” the spokesperson said.
JLR expects huge growth in four cylinder powered vehicles market.
“It is one of the reasons we have the long-term strategy.
The four cylinder engine will be smaller and will have high sustainability and performance.
At present, JLR is upbeat about the demand pick-up.
It is receiving 25,000 - 30,000 bookings for the compact premium sports utility vehicle Land Rover Evoque in the UK, Europe and other global markets.
Meanwhile, the UK-based subsidiary of Tata Motors, is in the process of launching refreshed versions of 12 Jaguar car models, which include XK, XF, XJ. “Many people have postponed buying of Jaguars. But after we launch the refreshed models of XK, XF and XJ we expect sales of Jaguars to go up,“ the JLR official said.
Global sales of Jaguar had fallen by 23 per cent to 19,124 units in the first five months of this financial year, as compared to same period previous year.
While cumulative sales of Land Rover are 83,327 units, higher by 23 per cent for the same period over previous year.
Source: MyDigitalFC
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