Home / Industry / Manufacturing /  Jaguar Land Rover plans to assemble XE model in India

Mumbai: Jaguar Land Rover India Pvt. Ltd, the local arm of the British luxury car maker Jaguar Land Rover Automotive Plc, plans to assemble the Jaguar XE sedan locally for the Indian market, said two people with direct knowledge of company’s plans.

The XE, the cheapest Jaguar, will mark the Coventry, England-based firm’s debut into the volume luxury car market. Expected to play a vital role in lifting overall JLR sales and help it close in on its German rivals, the XE will be pitted against the Mercedes C Class, Audi A4 and BMW 3-Series.

JLR plans to commence local assembly of the model in the first quarter of 2016, said the persons quoted above.

In an e-mail response, Del Sehmar, spokesman at Jaguar Land Rover, said the company continues to explore the business case to manufacture further products from its Pune facility.

“The Jaguar XE will not be launched in India until 2016 and at this stage, I cannot confirm if this car will be manufactured locally," he said.

JLR India assembles its Land Rover Freelander, Jaguar XF and XJ models in Pune. Local assembly will help the firm price the new model competitively. India levies a duty of 110% on imported cars and close to 60% on completely knocked-down (CKD) car kits.

“Given Jaguar’s positioning in the market, the XE will command a price premium over the rivals," said Puneet Gupta, analyst at IHS Automotive, a market research and sales forecasting firm.

Code-named X760, the company is likely to start rolling out the locally-assembled model either from end of next calendar year or beginning of 2016, said one of the two people cited earlier. The company plans to sell 1,300-1,400 units per month, he said.

Unlike other emerging markets, India sales make a very small share of JLR’s global sales. In 2013, JLR sold 3,000 units in India and is expected to close this year with 3,100, according to IHS. JLR does not report India-specific sales separately. IHS’ Gupta estimates the sales of the India division to expand by 20% in 2015.

For buyers of XF and XJ, exclusivity scores over price, said Deepesh Rathore, founder and director at Emerging Market Automotive Advisory (EMAA), a Gurgaon-based consulting and sales forecasting firm.

However, with the XE, the company will enter into a slightly more price-sensitive segment. “It is therefore important that the same tax structure is applicable to the model as rivals, for a competitive pricing. Hence, local assembly is very critical."

Jaguar’s models in India now cost from 49 lakh. It is likely to price the XE above 28 lakh.

A latecomer to the Indian market, JLR has a lot of catching-up to do. Its German rivals have been around much longer, offer more products and have stronger sales networks. While Audi India Pvt. Ltd, the luxury car market leader, sold 10,002 units in 2013, Mercedes Benz India Pvt. Ltd and BMW India Pvt. Ltd, the second and third largest, sold 9,003 and 7,327 units respectively in the same year.

Even as the broader car market in India sputtered with car sales plunging 10% in the year that ended in 2013—the lowest in 11 years, luxury cars bucked the trend. Luxury car sales expanded 11.6% to 29,600 units in the same period compared to a year ago. To be sure, luxury cars account for less than 2% of the overall car market.

The XE could help raise Jaguar’s India volumes significantly and may account for half of company’s total sales in two years after launch, said EMAA’s Rathore. Fuelled by new model launches, Rathore estimates the luxury car market in India will hit the 50,000-mark in 2015 and end the current year with sales of close to 38,000 units.

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