Says the plant would help in giving access to a lower cost location for manufacturing and sourcing all parts of the same process
Jaguar Land Rover (JLR), a subsidiary of homegrown Tata Motors, expects its upcoming plant in Slovakia to start production by the end of 2018 and ease cost pressures on the company.
The company, which uses lightweight aluminium for its cars, would deploy advanced technologies and engineering at its Slovakia plant that would contribute in push down costs.
JLR has been facing rise in costs due to increase in aluminium prices in the recent times.
As per the company officials, JLR had tried to offset the rising aluminium costs with hedging on a short-term basis.
During a recent earnings call with analysts, a company official said, "In material costs, if aluminium stays at its present level than that would, all other things being equal, be a cost pressure on the business which we have to take on just like all other sorts of pressures. It is a bit higher than that it was this time last year."
JLR is making over £4 billion in capital expenditure, including research & development, this year. It will spend about $2 billion for the first phase of the Slovakian plant, its first European facility outside of the UK. The plant will have a capacity of 150,000 units initially.
The company executives, in the same call after the announcement of its third-quarter results, said JLR is facing challenges, particularly in the UK due to Brexit, with diesel uncertainty as well as the new diesel taxes. In the US the company, concerned over the cyclicality of the business, is making a significant amount to maintain its market share.
Meanwhile, China continues to drive its retail sales.
JLR's retail sales during the third quarter grew 3.5% to 154,447 units, driven primarily by a 14.6% increase in China sales and an 18.2% rise in overseas markets. The company officials said that sales were propped up by demand for the new Range Rover Velar, Land Rover Discovery, recently-launched Jaguar E-PACE compact SUV and, in China, the long-wheelbase Jaguar XF.
This improvement was offset by flatter demand in the US, UK and Europe, and the impact of model year changeovers for the Range Rover and Range Rover Sport.
THE PREMIUM DRIVE
- JLR's retail sales during the third quarter grew 3.5% to 154,447 units, driven primarily by a 14.6% increase in China sales
- Sales were propped up by demand for the new Range Rover Velar, Land Rover Discovery and Jaguar E-PACE compact SUV
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