Saturday, 6 August 2011

Tata Motors to challenge BMW with a hybrid supercar and an entry-level sedan

Jaguar, the 76-year-old British luxury-car brand owned by Tata Motors, aims to challenge BMW with a hybrid supercar and an entry-level sedan to compete with the 3-Series. The new models are part of Tata's plans to invest $2.5 billion annually in product development at Jaguar and sister brand Land Rover over the next five years. The spending will include 40 new vehicles or upgrades, including the Range Rover Evoque, which will be presented in Liverpool today. 

Tata Motors is turning to the British luxury brands, which it purchased in 2008 from Ford, for growth and to drive international ambitions as the cut-rate Nano model sputters. While Land Rover is targeting record sales on the compact Evoque, Jaguar aims to reverse declining demand by rounding out its product offering. 

"The company now revolves around the JLR unit and not the other way around," said Ashvin Chotai, the managing director for Intelligence Automotive Asia. "The next challenge for both the brands is to keep the product pipeline going and exploring new product segments." 

Sales of the Nano, the world's cheapest car, plunged 48% over the past two months, with demand burdened by higher borrowing costs for buyers in India, its dominant market. The Jaguar Land Rover unit, based in Gaydon, England, generated 57% of Tata Motors' revenue for the year ended March 31, up from 53%a year earlier. The division's pretax profit surged 20-fold to 1.12 billion pounds for the fiscal year. 


The Jaguar Land Rover division "contributes definitely more than half the profit so it is clearly very significant for the performance of the group," Chief Executive Officer Carl- Peter Forster, a former BMW and General Motors Co. executive, said yesterday at briefing with reporters in Liverpool. 

The flow of technology between the British luxury brands and Tata Motors "shouldn't be just one way," said Forster, who was hired in February 2010 to realize the automaker's foreign ambitions. "The task is also to make sure that Tata adds to the value of JLR." While Land Rover is benefiting from robust demand for upscale sport-utility vehicles, Jaguar is slumping on a thin lineup and a tarnished image after decades of mediocre cars.


The carmaker, whose 1961 E-type was described as the "the most beautiful car ever built" by Ferrari founder Enzo Ferrari, finally overhauled the XJ in 2009, after making only modest changes in the four decades since its introduction in 1968. "It would be fair to say that the company floundered in the past for a bit too long," Callum said. To reestablish a reputation as an innovator, Jaguar is developing a production version of the C-X75 hybrid supercar concept. The model, which starts at 700,000 pounds and begins production in 2013, can accelerate to 60 miles per hour in less than 3 seconds and drive more than 50 kilometers on electric power. BMW's i8 hybrid supercar, also due in 2013, can travel up to 35 kilometers without using the combustion engine. 


Jaguar's sales fell 27%to 11,343 cars for the quarter ended June 30, as the sparse lineup and limited presence in China cut it out of the demand that's driving record sales for BMW, Audi and Mercedes. Unlike Jaguar, all three companies have factories in China, the world's biggest auto market. 


The Jaguar C-X75, which will be limited to 250 vehicles, could help the introduction of a sedan priced below the $52,500 XF, which is critical to boosting volumes. The brand's line-up currently consists of the XF and XJ sedans and the XK sports- car. 

A new entry-level sedan would give Jaguar a rival to the BMW 3-Series, Audi A4 and Mercedes-Benz C-Class, the best- selling models from the top-three luxury brands.


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