Jaguar Land Rover Gets Serious About Research

Jaguar Land Rover (JLR) has announced their plans to contribute to a reported GBP100 million new research and development facility based at Warwick University. The National Automotive Campus (NAIC), as it will be called, is set to be opened by 2016 and it is here that JLR aims to create the next generation of vehicle technology. JLR, which is owned by India’s Tata Motors, is aiming to employ around 1000 academics and engineers to work at the centre and these will join the 200 researchers and engineers already based at Warwick University. The NAIC will be a collaborative program with funding coming from JLR, who are set to invest some GBP50 million into the centre; the remainder will come from Tata Europe, Warwick Manufacturing Group and the British government's Higher Education Funding Council. The announcement is seen as a significant development in the turn-around of the JLR Group. Just a few years ago, in March of 2008, the Group looked like it was at the end of its road. Low investment and a confused and, frankly, poorly manufactured product line meant that Ford, the owners, wanted to sell out. It was at this time that Tata forked out USD2.3 billion to take control of the somewhat beleaguered JLR group. At that time, many wondered how an Indian company made famous by selling a USD2500 car could turn around a company with cars that can run up to USD100 000. Currently, demand for a number of the models in the JLR group is high and there is a reported waiting list of up to 9 months for the Range Rover and 6 months for the Range Rover Sports. Demand has been particularly strong in China where there is a reported EUR60 000 premium being paid to jump the queue; the sticker price for the car is approximately EUR338 000.

There is not much JLR can do to ease this situation as original sales estimates have been exceeded by a reported 40% and the JLR manufacturing plants at Solihull, Castle Bromwich and Halewood are currently running at 100% capacity where it is believed that the company may build some 750 000 vehicles this year. Engine manufacturing capacity is also a problem; Ford is still manufacturing most of their engines as a part of the early deal in 2008, but JLR is due to open a new engine plant in Wolverhampton so that the company can become master of its own identity. JLR vehicles are still largely manufactured in the UK, but Tata do assemble UK made CKD kits of the Freelander and Jag XF at its sprawling plant in Pune. Future developments include a joint venture with Chery in China where it is thought that up to 150 000 vehicles a year will be manufactured starting in 2015. Phil Popham, JLR’s Director of Sales Operations also said that talks are on-going with the Brazilian authorities about the possibilities of setting up a new manufacturing facility there.