In catchup mode, JLR plans more investments
Tata Motors-owned Jaguar Land Rover (JLR) will invest “over proportionally” on new products, technologies and facilities to match rivals in the luxury space, according to the company’s chief executive Ralf Speth.
The maker of SUVs such as Range Rover and Discovery, and sedans like XE and XF, plans to invest £4.3 billion on various activities, including development of new engines and technologies, in the current financial year.
“It is quite clear it (investment) goes up as we are also committed to spend over-proportional. Over-proportional because we are still in catch up mode,” JLR chief executive Ralf Speth said on the sidelines of Geneva Motor Show. He was responding to a query on whether the company planned to invest more going ahead.
“Other companies have developed critical mass of volume and critical mass of products...They have the facilities...we are just going to start a new plant in Slovakia, that means we will go on stream this year,” Speth said.
Over the last few years, JLR has invested in the range of £2.5-3.5 billion pounds a year. When asked if the enhanced investments on engines and electric vehicles would impact profitability, he said: “Yes. There will be impact on margins”.
Commenting specifically on JLR’s plans regarding Indian market, Speth said: “It depends on the market, whenever you sell more cars you also expand. We are assembling six cars already in India”.
The company is witnessing encouraging developments in the country in terms of GDP growth, which is in the range of 6-7%, he added. Speth said JLR also needs to develop new powertrains and technologies going ahead, which requires a lot of investment. “It is also a challenge for us...we have to develop refined conventional engines. So, conventional internal combustion engines on one hand and the on the other hand the new ones and that stretches an organisation unbelievably. It is not only a question of manpower or skills but also money,” he added.
Speth said although electrification and hybridisation will play a very important role in the future, internal combustion engines (ICE) will also continue to play a key role going ahead.
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