JLR to open new plant in Brazil

October 3, 2013: Jaguar Land Rover has already given the green light to open a new plant in Brazil, according to a job advertisement on its careers website.

According to the advert – which has just been placed on the company site – JLR is looking for a plant quality manager for the new facility in Brazil. “Portuguese language skills will be definite advantage,” the ad states.

Previously, JLR boss Dr Ralph Speth has only admitted to “very intensive discussions” with the Brazilian government. Unlike JLR’s planned Chinese factory, the company does not need a local partner in order to start manufacturing cars. Speth has been quoted as saying that any factory would begin by assembly vehicles supplied as kits from the UK.

JLR is hot on the heels of Audi and Mercedes; both companies have recently announced plans to open factories in Brazil. There’s no news yet as to which models will be built by JLR, but Land Rover models account for the vast majority of the company’s Brazilian sales, making the Freelander (pictured) a contender for South American production.

JLR closes on sales record

Meanwhile, JLR is on course to generate £2.75 billion (Rs 27,868 crore) in pre-tax earnings by next April, according to latest figures. As a result, the firm is on target to be the most successful company in the history of the British car industry.

The year after obtaining £500m in private bank loans in 2009, JLR had revenues of £6.53 billion. In the financial year that ended in April this year, it banked £15.78 billion (Rs 159,914 crore), a rise of 140 percent.

Pre-tax earnings in the immediate aftermath of the credit crunch were £349m, impressive given the market circumstances. To April 2013, that leaped to £2.4bn, and it is expected to jump to £2.75bn by next April.

JLR is currently investing far more than it makes in annual profits, in order to expand its product line and pull all of its models on to three basic platforms. The majority of models will be powered by a new four-cylinder engine range. It is also investing in a joint-venture factory in China.

As of April, JLR had after-tax profits of about £1.2bn (Rs 12,160 crore), but it is spending £5bn (Rs 50,670 crore) this year and next year on investments in new products and new factories. This intensive burst will help produce the new five-model Discovery family - which also replaces the Freelander - the new four-cylinder engine plant in Wolverhampton, Jaguar’s new aluminium platform and its new compact saloon and SUV.

JLR expects costs to be driven down. The big Range Rover and Discovery 5 model families will be built on the same aluminium platform and the Evoque and future baby Discoveries built on the same steel platform. Savings will also be made when JLR switches to its own ‘Hotfire’ petrol and diesel engines, rather than buying in units from rival car makers, as happens today.

Based on current trends, JLR could build 750,000 cars in the medium term, well up on its global sales of 357,773 last year. It is expected that the compact Jaguar saloon and SUV should add 150,000 units by 2017, and Land Rover predicts the new baby Discoveries to outperform their Freelander predecessors.

A major makeover for the Jaguar XF (which will get the new Hotfire engines) will boost Jaguar’s presence in one of the industry’s most profitable segments.

HILTON HOLLOWAY, AUTOCAR UK