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March 10, 2017

New JLR Brazil chief awaits revised local content rules

Eight months after opening its Brazilian assembly plant in Itatiaia, 174km/110 miles northwest of Rio de Janeiro City, Tata Motors' luxury vehicle unit Jaguar Land Rover's South American outpost has a new executive president for Brazil and Latin America: Frédéric Drouin.

Eight months after opening its Brazilian assembly plant in Itatiaia, 174km/110 miles northwest of Rio de Janeiro City, Tata Motors’ luxury vehicle unit Jaguar Land Rover’s South American outpost has a new executive president for Brazil and Latin America: Frédéric Drouin.

He’s French Swiss and has learned much about this country having worked here for a total of 10 years on two postings to Peugeot of Brazil, most recently as president from 2010 to 2014.

As an expert in the ups and downs of both the Brazilian economy and its automotive industry, he is awaiting the details of the new Inovar-Auto local production/content rules which should be announced some time this year. The current regulations end on 31 December, 2017.

“We need a planning window of 10 years minimum to decide on development of our plant . This will enable us to set a timeline for increasing local content and consider exporting opportuinities,” Drouin said in his meeting with the press.

The plant currently produces the Range Rover Evoque and Land Rover Discovery Sport.

Last year the automaker sold 7,458 vehicles – 788 Jaguars and 6,670 Land Rover. Of the Land Rovers, two thirds were assembled at Itatiaia.

Volume was down 23% year on year while total automobile and light commercial vehicle sales in Brazil fell 21%.

Drouin expects a levelling-off of top end vehicle sales in 2017 and some recovery in 2018.

He said personal security concerns were diverting some potential buyers’ funds and said sky rocketing service costs were also a barrier in the segment.

JLR has responded by offering factory-certified armour [its special vehicles unit in the UK has years of experience with armoured vehicles – ed]  and scheduled service packages at fixed prices frozen for five years.

Drouin reckons the luxury vehicle sector must adapt to present conditions and believe in the Brazilian market’s future growth.

Initial spend on the plant – JLR’s first fully self-funded factory outside the United Kingdom – was BRL750m/US$245m.

Capacity is 24,000 units on three shifts though currently only one shift of 320 direct employees is operating.

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