Tata Motors’ Jaguar Land Rover strategy for Brazil apparently is not to reveal all its plans at once. So we now know for sure, at last, there will be a plant but not the products it will produce initially.
Although its studies go back two years, Land Rover is very likely to be the last brand to submit local manufacturing plans under the Inovar-Auto automotive scheme.
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The Freelander and Evoque are natural candidates for initial build but so, just-autohas learned is the new Defender. After all, in a market so sensitive to pricing as Brazil, the need for lower cost models is pressing and local manufacture achieves that by avoiding taxes levied on full imports.
Initial investment through 2020 in Itatiaia, 175km/110miles west of Rio de Janeiro City, is BRL750m/US$320m/GBP240m. The region is also home to MAN-VW Trucks, PSA Peugeot Citroën and Nissan.
Initial production capacity of 24,000 units yearly is a shade over Mercedes-Benz’s recently announced 20,000 and short of Audi’s 26,000 [the premium brand is adding capacity at the VW plant rather than starting from scratch – ed]. Leading premium brand BMW is eyeing a factory good for 30,000 units a year.
Inovar-Auto has more flexible rules for automakers with factories sized for up to 35,000 units as long as they guarantee a BRL10,000/$4,400 investment per built unit minimum. Local content achievement goals are then relaxed a little.
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By GlobalDataThis investment is Land Rover’s first exclusively using its own resources in a plant outside England. There is a joint venture plant under construction in China while the CKD operation in India is run by parent Tata Motors.
Following the start of production by early 2016, exports to neighbouring countries are planned. Plant expansion is therefore likely later.
As a specialist in SUVs of different levels of sophistication, Land Rover has managed to grow quickly in Brazil, a market that increasingly welcomes this sort of vehicle. The brand exceeds 50% market share in its segments here.
Interviewed by the O Estado de S Paulo newspaper, JLR’s global product development chief Phil Hodkinson made clear the Brazil plant was a long-considered decision.
“We would not invest such an amount of money if we did not believe in the country’s potential. It is a market poised to grow a great extent. But first we must build the plant, establish the supply chain, train and make workers capable and consolidate our products made here. Then the next step will be expansion,” he said.
